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					Offshore Oil and Gas Approvals
      in Atlantic Canada


        A guide to regulatory approval processes
  for oil and natural gas exploration and production
   in the Newfoundland and Labrador Offshore Area

                     January 2004




       The Regulatory Roadmaps Project
                  Erlandson Consulting Inc.
                            and
             Petroleum Research Atlantic Canada
Cover photographs courtesy of the Canadian Association of Petroleum Producers, Secunda Marine and
Exxon Mobil in Newfoundland and Labrador.
        Firefighter
        Hibernia
        Iceberg towing




The preparation of this Guide in 2001 was undertaken jointly by the Atlantic Canada Petroleum Institute, and
Erlandson & Associates Consultants, Victoria, British Columbia. Writing and compilation was by Reade Davis in
St. John’s, Newfoundland and Labrador, with assistance from Gloria Chao in Halifax, Nova Scotia.

Document preparation by LB Word Works, Victoria, British Columbia.

Funding for the original Guide was provided by the Canadian Association of Petroleum Producers, Natural
Resources Canada, the Atlantic Canada Petroleum Institute and Memorial University of Newfoundland.

The 2004 edition of this Guide was updated by Erlandson Consulting Inc. with assistance from Petroleum
Research Atlantic Canada. The Guide was updated under the auspices of the Atlantic Energy Roundtable with
joint funding from Natural Resources Canada, Province of Newfoundland and Labrador, Province of Nova
Scotia and the Canadian Association of Petroleum Producers.
                                                                                                   Reader’s Caution



READER’S CAUTION

The Guide is a reference for those interested in gaining an understanding of the regulatory approval procedures for
oil and gas industry activities in the Newfoundland and Labrador Offshore Area. Regulatory agencies provided
significant assistance during the development of the Guide. However, such assistance should not be construed as
any intent on the part of a regulator to endorse or apply this Guide as a regulatory document, or to accept this
Guide in place of any official agency guideline, requirement, condition, policy, or procedure. In the event of any
inconsistency or conflict between this Guide and official regulatory documents, the latter prevail.

While Erlandson Consulting Inc. and Petroleum Research Atlantic Canada have endeavoured to ensure the
correctness of the information contained in the Guide, accuracy cannot be guaranteed.

Web sites and official sources are provided for easy reference in the Introduction and in Appendix C. Where
appropriate, users of this Guide should seek any specific clarifications and interpretations from official sources,
government regulators or independent counsel.

The Reader should also note that, since this Guide was first published in 2001, the Province of Newfoundland
has officially become the Province of Newfoundland and Labrador. This change is reflected in the Guide wherever
practical to do so. However, the convention used in the Guide also retains reference to Newfoundland where it is
found in official documents where such documents pre-date the provincial name change.

An electronic copy of the Guide can be found at www.oilandgasguides.com.

Other guides available as part of the Regulatory Roadmaps Project include:
    •    Oil and Gas Approvals in Atlantic Canada – Nova Scotia Offshore Area;
    •    Oil and Gas Approvals in the Northwest Territories – Southern Mackenzie Valley;
    •    Oil and Gas Approvals in the Northwest Territories – Inuvialuit Settlement Region;
    •    Oil and Gas Approvals in the Northwest Territories – Gwich’in Settlement Area;
    •    Oil and Gas Approvals in the Northwest Territories – Sahtu Settlement Area; and
    •    Oil and Gas Approvals in the Beaufort Sea.

Enquiries about this Guide can be directed to:
Erlandson Consulting Inc.
4325 Ridgewood Crescent
Victoria, British Columbia
V8Z 4Z6
Telephone: (250) 744-1224




Newfoundland and Labrador Offshore Guide – January 2004                                                               i
Acknowledgements



ACKNOWLEDGEMENTS

The preparation of this Guide and its updating was made possible by the information and assistance provided by
many people from provincial and federal agencies, and from industry operators. Special thanks go to the managers
and staff of the following organizations for their contribution of knowledge and experience, and for their support for
the project.

Canada Border Services Agency
Canada-Newfoundland Offshore Petroleum Board
Canadian Association of Petroleum Producers
Canadian Coast Guard, Fisheries and Oceans Canada
Canadian Environmental Assessment Agency
Canadian Transportation Agency
Chevron Canada Resources
Citizenship and Immigration Canada
D.G. Taylor, Inc.
Environment Canada
Exxon Mobil
Fisheries and Oceans Canada
Human Resource Development Corporation
Husky Oil
McInnes Cooper, St. John’s
Memorial University of Newfoundland
Mobil Oil Canada
National Energy Board
Natural Resources Canada
Newfoundland and Labrador Department of Environment
Newfoundland and Labrador Department of Fisheries and Aquaculture
Newfoundland and Labrador Department of Labour
Newfoundland and Labrador Department of Natural Resources
Petro-Canada
Petroleum Research Atlantic Canada
Transport Canada – Marine Safety




ii                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                                                       Table of Contents



CONTENTS


READER’S CAUTION .........................................................................................................................................i

ACKNOWLEDGEMENTS................................................................................................................................. II

CONTENTS .......................................................................................................................................................III

INTRODUCTION............................................................................................................................................. I-1
            PURPOSE   ......................................................................................................................................... I-1
            SCOPE     ......................................................................................................................................... I-1
                      Life Cycle of an Offshore Oil and Gas Project ................................................................... I-1
                      Map 1: General Location of the Newfoundland and Labrador Offshore Area .................... I-3
                      The Newfoundland and Labrador Offshore Area................................................................ I-4
                      Agencies Involved In Regulating Offshore Activities........................................................... I-5
            CONTENT AND STRUCTURE OF THE GUIDE ................................................................................. I-6
                      Part A: Authorization Processes of the Offshore Petroleum Board .................................... I-7
                      Part B: Authorization Processes of Other Regulatory Agencies......................................... I-8
            TERMINOLOGY.................................................................................................................................. I-9
                      Definitions ........................................................................................................................ I-9
                      Abbreviations...................................................................................................................I-11
            PRINCIPAL ACTS AND REGULATIONS GOVERNING OIL AND GAS ACTIVITIES....................I-13
                      Joint Federal - Provincial Acts, Regulations and Guidelines .............................................I-13
                      Federal Acts and Regulations ...........................................................................................I-15
                      Provincial Acts.................................................................................................................I-19

PART A                 AUTHORIZATION PROCESSES OF THE OFFSHORE PETREOLUM BOARD

1.0         CNOPB’S GENERAL WORK AUTHORIZATION PROCESS........................................................... 1
            1-1                APPLICATION FOR A WORK AUTHORIZATION IS SUBMITTED TO THE BOARD ............................ 3
            1-2                APPLICATION IS REVIEWED BY THE BOARD IN CONSULTATION WITH OTHER AGENCIES ........... 4
            1-3 & 1-4          BOARD DECISION REGARDING THE ACCEPTABILITY OF THE CANADA-NEWFOUNDLAND
                               BENEFITS PLAN..................................................................................................................... 5
            1-5 TO 1-7         BOARD DECISION REGARDING THE GRANTING OF A WORK AUTHORIZATION .......................... 5
            1-8                LICENCES, PERMITS AND AUTHORIZATIONS FROM FEDERAL OR PROVINCIAL AGENCIES
                               MAY BE REQUIRED ............................................................................................................... 5
            1-9                CONTINUING OBLIGATIONS ................................................................................................... 6
            1-A TO 1-I         REQUIREMENTS OF AN APPLICATION FOR A WORK AUTHORIZATION ....................................... 6
            1-A                OPERATING LICENCE............................................................................................................. 6
            1-B                CANADA-NEWFOUNDLAND BENEFITS PLAN ........................................................................... 7
            1-C                SAFETY PLAN ....................................................................................................................... 8
            1-D                ENVIRONMENTAL ASSESSMENT ........................................................................................... 11
            1-E                CERTIFICATE(S) OF FITNESS ................................................................................................ 12
            1-F                PROOF OF FINANCIAL RESPONSIBILITY ................................................................................ 13
            1-G                PROGRAM DESCRIPTION ...................................................................................................... 14
            1-H                DECLARATION OF FITNESS .................................................................................................. 14
            1-I                ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD .................................................. 15




Newfoundland and Labrador Offshore Guide – January 2004                                                                                                          iii
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2.0    GEOPHYSICAL, GEOLOGICAL, GEOTECHNICAL OR ENVIRONMENTAL
       PROGRAM AUTHORIZATION........................................................................................................2-1
       2-1        APPLICATION FOR A GEOPHYSICAL, GEOLOGICAL, GEOTECHNICAL OR ENVIRONMENTAL
                  PROGRAM AUTHORIZATION SUBMITTED TO THE BOARD ......................................................2-3
       2-2        APPLICATION REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES).............2-4
       2-3 TO 2-4 BOARD DECISION REGARDING THE ACCEPTABILITY OF THE CANADA-NEWFOUNDLAND
                  BENEFITS PLAN..................................................................................................................2-4
       2-5 TO 2-7 BOARD DECISION REGARDING THE ISSUANCE OF A GEOPHYSICAL, GEOLOGICAL,
                  GEOTECHNICAL OR ENVIRONMENTAL PROGRAM AUTHORIZATION ......................................2-5
       2-8        POSSIBLE LICENCES, PERMITS, APPROVALS AND AUTHORIZATIONS FROM OTHER
                  REGULATORY AGENCIES ....................................................................................................2-5
       2-9        CONTINUING OBLIGATIONS ................................................................................................2-5
       2-A TO 2-H REQUIREMENTS OF AN APPLICATION FOR A GEOPHYSICAL, GEOLOGICAL,
                  GEOTECHNICAL OR ENVIRONMENTAL PROGRAM AUTHORIZATION ......................................2-6
       2-A        OPERATING LICENCE..........................................................................................................2-7
       2-B        CANADA-NEWFOUNDLAND BENEFITS PLAN ........................................................................2-7
       2-C        SAFETY PLAN ....................................................................................................................2-7
       2-D        ENVIRONMENTAL ASSESSMENT ..........................................................................................2-8
       2-E        PROOF OF FINANCIAL RESPONSIBILITY ...............................................................................2-8
       2-F        PROGRAM DESCRIPTION .....................................................................................................2-9
       2-G        DECLARATION OF FITNESS .................................................................................................2-9
       2-H        ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD .................................................2-9
3.0    DRILLING PROGRAM AUTHORIZATION ...................................................................................3-1
       3-1        APPLICATION FOR A DRILLING PROGRAM AUTHORIZATION IS SUBMITTED TO THE BOARD ....3-3
       3-2        APPLICATION IS REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES) .........3-3
       3-3 TO 3-4 BOARD DECISION REGARDING THE ACCEPTABILITY OF THE CANADA-NEWFOUNDLAND
                  BENEFITS PLAN..................................................................................................................3-4
       3-5        COMPREHENSIVE STUDY UNDER CEAA MAY BE REQUIRED ................................................3-4
       3-6 TO 3-8 BOARD DECISION REGARDING THE ISSUANCE OF A DRILLING PROGRAM AUTHORIZATION....3-4
       3-9        POSSIBLE LICENCES, PERMITS AND AUTHORIZATIONS FROM OTHER REGULATORY
                  AGENCIES ..........................................................................................................................3-4
       3-10       CONTINUING OBLIGATIONS ................................................................................................3-5
       3-A TO 3-O REQUIREMENTS OF AN APPLICATION FOR A DRILLING PROGRAM AUTHORIZATION
                  AND/OR AN APPLICATION ...................................................................................................3-7
       3-A        OPERATING LICENCE..........................................................................................................3-7
       3-B        CANADA-NEWFOUNDLAND BENEFITS PLAN ........................................................................3-7
       3-C        SAFETY PLAN ....................................................................................................................3-7
       3-D        ENVIRONMENTAL ASSESSMENT ..........................................................................................3-8
       3-E        APPROVED DEVELOPMENT PLAN ...................................................................................... 3-10
       3-F        EXPLORATION LICENCE, SIGNIFICANT DISCOVERY LICENCE OR PRODUCTION LICENCE ...... 3-10
       3-G        CERTIFICATE(S) OF FITNESS ............................................................................................. 3-11
       3-H        PROOF OF FINANCIAL RESPONSIBILITY ............................................................................. 3-11
       3-I        PROGRAM DESCRIPTION ................................................................................................... 3-11
       3-J        OPERATIONS MANUALS ................................................................................................... 3-12
       3-K        DATA ACQUISITION PROGRAM ......................................................................................... 3-12
       3-L        A POOL, FIELD (WELL) LOCATION SURVEY ...................................................................... 3-12
       3-M        APPROVAL OF A MEANS FOR DISPOSING OF WASTE MATERIALS ........................................ 3-13
       3-N        DECLARATION OF FITNESS ............................................................................................... 3-13
       3-O        ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................... 3-13




iv                                                         Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                                               Table of Contents



4.0    APPROVAL TO DRILL A WELL .....................................................................................................4-1
       4-1          OPERATOR PROVIDES NOTIFICATION OF INTENTION TO DRILL OR RE-ENTER A WELL...........4-3
       4-2          APPLICATION FOR APPROVAL TO DRILL A WELL IS SUBMITTED TO THE BOARD ....................4-3
       4-3          OPERATOR MAKES AN ORAL PRESENTATION TO THE BOARD ...............................................4-3
       4-4          APPLICATION IS REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES) .........4-3
       4-5 TO 4-7   BOARD DECISION REGARDING THE ISSUANCE OF AN APPROVAL TO DRILL A WELL ..............4-4
       4-8          POSSIBLE LICENCES, PERMITS AND AUTHORIZATIONS FROM OTHER REGULATORY
                    AGENCIES ..........................................................................................................................4-4
       4-9          CONTINUING OBLIGATIONS DURING THE DRILLING OPERATION ..........................................4-5
       4-10         OPERATOR SUBMITS WELL LOGS TO THE BOARD IN ANTICIPATION OF WELL
                    TERMINATION PROGRAM....................................................................................................4-7
       4-11         BOARD EXAMINES WELL LOGS AND DETERMINES WHETHER FURTHER TESTING IS
                    REQUIRED .........................................................................................................................4-8
       4-12         OPERATOR SUBMITS TESTING PROGRAM TO THE BOARD .....................................................4-8
       4-13 TO 4-15 BOARD DECISION REGARDING THE ACCEPTABILITY OF THE TESTING PROGRAM...................4-8
       4-16         OPERATOR OBTAINS A FORMATION FLOW TEST APPROVAL FROM THE BOARD .....................4-9
       4-17         APPLICATION FOR APPROVAL TO TERMINATE A WELL IS SUBMITTED TO THE BOARD
                    (SUSPENSION, ABANDONMENT, OR COMPLETION)...............................................................4-9
       4-18 TO 4-20 BOARD DECISION REGARDING THE ISSUANCE OF AN APPROVAL TO TERMINATE A WELL .... 4-10
       4-21         WELL TERMINATION RECORD FORM IS SUBMITTED TO THE BOARD ................................... 4-10
       4-22         FINAL WELL REPORT IS SUBMITTED TO THE BOARD .......................................................... 4-10
       4-23         CONTINUING OBLIGATIONS ASSOCIATED WITH WELL TERMINATION ................................. 4-11
       4-A TO 4-G REQUIREMENTS OF AN APPLICATION FOR A DEVELOPMENT PROGRAM AUTHORIZATION
                    AND/OR AN APPLICATION ................................................................................................. 4-11
       4-A          DRILLING PROGRAM AUTHORIZATION AND ALL ASSOCIATED REQUIREMENTS ................... 4-12
       4-B          A SEABED SURVEY .......................................................................................................... 4-12
       4-C          A WELL PROGNOSIS ........................................................................................................ 4-12
       4-D          AN APPROVAL OF THE LOCATION OF A WELL.................................................................... 4-13
       4-E          EVIDENCE OF FINANCIAL RESPONSIBILITY ........................................................................ 4-13
       4-F          WELL EVALUATION PROGRAM ......................................................................................... 4-13
       4-G          ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................... 4-14
5.0    DIVING PROGRAM AUTHORIZATION.........................................................................................5-1
       5-1               APPLICATION FOR A DIVING PROGRAM AUTHORIZATION IS SUBMITTED TO THE BOARD........5-1
       5-2               APPLICATION IS REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES) .........5-4
       5-3 TO 5-5        BOARD DECISION REGARDING THE ISSUANCE OF A DIVING PROGRAM AUTHORIZATION .......5-4
       5-6               POSSIBLE LICENCES, PERMITS, APPROVALS AND AUTHORIZATIONS FROM OTHER
                         REGULATORY AGENCIES ....................................................................................................5-4
       5-7               CONTINUING OBLIGATIONS ................................................................................................5-5
       5-A TO 5-I        REQUIREMENTS OF AN APPLICATION FOR A DIVING PROGRAM AUTHORIZATION ..................5-5
       5-A               OPERATING LICENCE..........................................................................................................5-6
       5-B               CANADA-NEWFOUNDLAND BENEFITS PLAN ........................................................................5-6
       5-C               SAFETY PLAN ....................................................................................................................5-6
       5-D               ENVIRONMENTAL IMPACT STATEMENT/ENVIRONMENTAL PROTECTION PLAN ......................5-7
       5-E               CERTIFICATE(S) OF FITNESS ...............................................................................................5-7
       5-F               PROOF OF FINANCIAL RESPONSIBILITY ...............................................................................5-7
       5-G               PROGRAM DESCRIPTION .....................................................................................................5-8
       5-H               DECLARATION OF FITNESS .................................................................................................5-8
       5-I               DCBC CERTIFICATE OF COMPETENCY ................................................................................5-8
       5-J               ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD .................................................5-8




Newfoundland and Labrador Offshore Guide – January 2004                                                                                                   v
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6.0    EXPLORATION LICENCE ...............................................................................................................6-1
       6-1               CALL FOR NOMINATIONS....................................................................................................6-3
       6-2               INDUSTRY NOMINATES LAND .............................................................................................6-3
       6-3               BOARD ASSESSES NOMINATIONS ........................................................................................6-3
       6-4 & 6-5         DECISION BY THE BOARD REGARDING THE ISSUANCE OF A CALL FOR BIDS ..........................6-3
       6-6               MINISTERIAL REVIEW OF FUNDAMENTAL DECISION ............................................................6-3
       6-7               CALL FOR BIDS ISSUED BY BOARD......................................................................................6-4
       6-8               BIDS SUBMITTED BY INTERESTED PARTIES..........................................................................6-5
       6-9               BOARD ASSESSES BIDS ......................................................................................................6-5
       6-10 & 6-11       DECISION BY THE BOARD TO ACCEPT/REJECT BIDS .............................................................6-5
       6-12              SECURITY DEPOSIT SUBMITTED BY SUCCESSFUL BIDDERS...................................................6-5
       6-13 & 6-14       BOARD DECISION REGARDING THE ISSUANCE OF AN E XPLORATION LICENCE .......................6-6
       6-15              MINISTERIAL REVIEW OF FUNDAMENTAL DECISION ............................................................6-6
       6-16              EXPLORATION LICENCE ISSUED ..........................................................................................6-6
       6-17              HOLDER OF E XPLORATION LICENCE SATISFIES ENVIRONMENTAL STUDIES RESEARCH
                         FUND REQUIREMENTS AND BID CHEQUES RETURNED BY THE BOARD ..................................6-7
7.0    SIGNIFICANT DISCOVERY DECLARATION AND SIGNIFICANT DISCOVERY LICENCE .7-1
       7-1               SIGNIFICANT DISCOVERY DECLARATION (SDD) PROCESS INITIATED ...................................7-1
       7-2               APPLICATION FOR SIGNIFICANT DISCOVERY DECLARATION IS SUBMITTED TO THE BOARD ...7-1
       7-3               NOTICE OF PRELIMINARY TECHNICAL REVIEW....................................................................7-4
       7-4               PRELIMINARY TECHNICAL REVIEW .....................................................................................7-4
       7-5               REPORT TO CEO/APPLICANT ..............................................................................................7-4
       7-6               CEO MAKES RECOMMENDATION FOR BOARD APPROVAL ...................................................7-4
       7-7               BOARD DECISION REGARDING THE NEED FOR A HEARING ...................................................7-5
       7-8               NOTICE OF PROPOSED DECISION GIVEN BY THE BOARD.......................................................7-7
       7-9               AN OIL AND GAS COMMITTEE (OGC) HEARING MAY BE REQUESTED..................................7-7
       7-10 TO 7-16      BOARD DECISION REGARDING THE ISSUANCE OF A SIGNIFICANT DISCOVERY
                         DECLARATION ...................................................................................................................7-8
       7-17              APPLICATION FOR SIGNIFICANT DISCOVERY LICENCE (SDL) SUBMITTED TO THE BOARD .....7-9
       7-18              APPLICATION IS REVIEWED BY THE BOARD FOR ACCURACY AND CONSISTENCY...................7-9
       7-19              SDL IS ISSUED ...................................................................................................................7-9
       7-20              CONTINUING OBLIGATIONS .............................................................................................. 7-10
8.0    COMMERCIAL DISCOVERY DECLARATION .............................................................................8-1
       8-1          COMMERCIAL DISCOVERY DECLARATION (CDD) PROCESS INITIATED .................................8-3
       8-2          APPLICATION FOR COMMERCIAL DISCOVERY DECLARATION IS SUBMITTED TO THE BOARD..8-3
       8-3          NOTICE OF PRELIMINARY TECHNICAL REVIEW....................................................................8-4
       8-4          PRELIMINARY TECHNICAL REVIEW .....................................................................................8-4
       8-5          REPORT TO CEO/APPLICANT ..............................................................................................8-4
       8-6          CEO MAKES RECOMMENDATION FOR BOARD APPROVAL ...................................................8-4
       8-7          BOARD DECISION REGARDING THE NEED FOR A HEARING ...................................................8-4
       8-8          NOTICE OF PROPOSED DECISION GIVEN BY THE BOARD.......................................................8-5
       8-9          BOARD DETERMINES WHETHER AN OIL AND GAS COMMITTEE (OGC) HEARING IS
                    REQUIRED .........................................................................................................................8-5
       8-10 TO 8-16 BOARD DECISION REGARDING THE ISSUANCE OF A COMMERCIAL DISCOVERY
                    DECLARATION ...................................................................................................................8-6




vi                                                           Newfoundland and Labrador Offshore Guide – January 2004
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9.0    PRODUCTION LICENCE .................................................................................................................9-1
       9-1               CDD EXISTS FOR THE LANDS IN QUESTION.........................................................................9-1
       9-2               APPLICATION FOR A PRODUCTION LICENCE IS SUBMITTED TO THE BOARD ...........................9-1
       9-3               APPLICATION IS REVIEWED BY THE BOARD .........................................................................9-3
       9-4 TO 9-6        DECISION BY THE BOARD REGARDING THE ISSUANCE OF A SINGLE PRODUCTION
                         LICENCE TO MULTIPLE INTEREST HOLDERS OR IF TERMS/CONDITIONS ARE ATTACHED ........9-3
       9-7               PRODUCTION LICENCE IS ISSUED ........................................................................................9-3
       9-8               AMENDMENTS MAY BE PROPOSED .....................................................................................9-4
10.0   DEVELOPMENT APPLICATION .................................................................................................. 10-1
       10-1              APPLICANT VERBALLY INFORMS THE BOARD OF THE INTENTION TO DEVELOP ................... 10-1
       10-2              APPLICANT FILES DEVELOPMENT APPLICATION WITH THE BOARD AND HOLDS PUBLIC
                         INFORMATION SESSIONS................................................................................................... 10-1
       10-3 & 10-4       PROJECT DESCRIPTION IN DEVELOPMENT APPLICATION SENT TO CEAA............................ 10-3
       10-5              APPLICATION IS REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES) ....... 10-3
       10-6              BOARD DISTRIBUTES DEVELOPMENT PROJECT INFORMATION TO THE PUBLIC .................... 10-3
       10-7              BOARD DETERMINES WHETHER THE DEVELOPMENT PROJECT WILL BE SUBJECT TO
                         PUBLIC REVIEW ............................................................................................................... 10-4
       10-8 & 10-9       BOARD APPOINTS A COMMISSIONER OR MEMBER(S) TO THE REVIEW PANEL AND SETS
                         TERMS OF REFERENCE ..................................................................................................... 10-4
       10-10             PUBLIC HEARINGS CONDUCTED ....................................................................................... 10-4
       10-11             COMMISSIONER OR REVIEW PANEL SUBMITS FINDINGS TO THE BOARD AND THE TWO
                         MINISTERS....................................................................................................................... 10-4
       10-12             BOARD CONSIDERS THE RECOMMENDATIONS OF THE REVIEW PANEL ................................ 10-4
       10-13             CNOPB CONDUCTS INTERNAL REVIEW............................................................................ 10-5
       10-14 & 10-15     BOARD DECISION REGARDING BENEFITS PLAN ................................................................. 10-5
       10-16 & 10-17     BOARD’S FUNDAMENTAL DECISION REGARDING DEVELOPMENT PLAN.............................. 10-5
       10-18             MINISTERIAL REVIEW OF FUNDAMENTAL DECISION .......................................................... 10-5
       10-19             BOARD ACCEPTS DEVELOPMENT APPLICATION/DECISION REPORT PREPARED ................... 10-5
       10-20             PUBLIC NOTIFICATION ..................................................................................................... 10-6
       10-21             CONTINUING OBLIGATIONS .............................................................................................. 10-6
       10-A TO 10-H      REQUIREMENTS OF A DEVELOPMENT APPLICATION ........................................................... 10-6
       10-A              DEVELOPMENT PLAN ....................................................................................................... 10-6
       10-B              CANADA-NEWFOUNDLAND BENEFITS PLAN ...................................................................... 10-8
       10-C              DEVELOPMENT APPLICATION SUMMARY .......................................................................... 10-8
       10-D              SAFETY PLAN .................................................................................................................. 10-8
       10-E              ENVIRONMENTAL IMPACT STATEMENT/ENVIRONMENTAL PROTECTION PLAN .................... 10-9
       10-F              SOCIO-ECONOMIC IMPACT STATEMENT .......................................................................... 10-10
       10-G              PROOF OF FINANCIAL RESPONSIBILITY ........................................................................... 10-10
       10-H              ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................. 10-10
11.0   DEVELOPMENT PROGRAM AUTHORIZATION ....................................................................... 11-1
       11-1         GENERAL MEETING BETWEEN THE OPERATOR AND REGULATORY AGENCIES .................... 11-3
       11-2         APPLICATION FOR A DEVELOPMENT PROGRAM AUTHORIZATION IS SUBMITTED TO
                    THE BOARD...................................................................................................................... 11-3
       11-3         APPLICATION IS REVIEWED BY THE BOARD IN CONSULTATION WITH OTHER AGENCIES ...... 11-3
       11-4 TO 11-6 BOARD DECISION REGARDING THE ISSUANCE OF A DEVELOPMENT PROGRAM
                    AUTHORIZATION .............................................................................................................. 11-4
       11-7         POSSIBLE LICENCES, PERMITS AND AUTHORIZATIONS FROM OTHER REGULATORY
                    AGENCIES ........................................................................................................................ 11-4
       11-8         CONTINUING OBLIGATIONS .............................................................................................. 11-4
       11-A TO 11-I REQUIREMENTS OF AN APPLICATION FOR A DEVELOPMENT PROGRAM AUTHORIZATION
                    AND/OR AN APPLICATION ................................................................................................. 11-6
       11-A         OPERATING LICENCE........................................................................................................ 11-6
       11-B         APPROVED CANADA-NEWFOUNDLAND BENEFITS PLAN .................................................... 11-6


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       11-C              APPROVED SAFETY PLAN ................................................................................................. 11-6
       11-D              APPROVED ENVIRONMENTAL IMPACT STATEMENT/ENVIRONMENTAL PROTECTION PLAN ... 11-7
       11-E              APPROVED DEVELOPMENT PLAN ...................................................................................... 11-7
       11-F              PROOF OF FINANCIAL RESPONSIBILITY ............................................................................. 11-7
       11-G              PROGRAM DESCRIPTION ................................................................................................... 11-7
       11-H              DECLARATION OF FITNESS ............................................................................................... 11-7
       11-I              ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................... 11-8
12.0   PRODUCTION OPERATIONS AUTHORIZATION...................................................................... 12-1
       12-1         APPLICATION FOR A PRODUCTION OPERATIONS AUTHORIZATION IS SUBMITTED TO
                    THE BOARD...................................................................................................................... 12-1
       12-2         APPLICATION IS REVIEWED BY THE BOARD (POSSIBLE CONSULTATION WITH OTHER
                    AGENCIES) ...................................................................................................................... 12-3
       12-3 TO 12-5 BOARD DECISION REGARDING THE ISSUANCE OF A PRODUCTION OPERATIONS
                    AUTHORIZATION .............................................................................................................. 12-3
       12-6         POSSIBLE LICENCES, PERMITS AND AUTHORIZATIONS FROM OTHER REGULATORY
                    AGENCIES ........................................................................................................................ 12-4
       12-7         CONTINUING OBLIGATIONS .............................................................................................. 12-4
       12-A TO 12-S REQUIREMENTS OF AN APPLICATION FOR A PRODUCTION OPERATIONS AUTHORIZATION
                    AND/OR AN APPLICATION ................................................................................................. 12-7
       12-A         OPERATING LICENCE........................................................................................................ 12-7
       12-B         APPROVED CANADA-NEWFOUNDLAND BENEFITS PLAN .................................................... 12-7
       12-C         APPROVED SAFETY PLAN ................................................................................................. 12-7
       12-D         APPROVED ENVIRONMENTAL IMPACT STATEMENT/ENVIRONMENTAL PROTECTION PLAN ... 12-8
       12-E         APPROVED DEVELOPMENT PLAN ...................................................................................... 12-8
       12-F         CERTIFICATE(S) OF FITNESS ............................................................................................. 12-9
       12-G         PRODUCTION LICENCE ..................................................................................................... 12-9
       12-H         PROOF OF FINANCIAL RESPONSIBILITY ............................................................................. 12-9
       12-I         PROGRAM DESCRIPTION ................................................................................................... 12-9
       12-J         OPERATIONS MANUAL ................................................................................................... 12-10
       12-K         APPROVED DATA ACQUISITION PROGRAM ...................................................................... 12-10
       12-L         POOL, FIELD (WELL) AND PRODUCTION INSTALLATION LOCATION SURVEYS................... 12-10
       12-M         A FLOW (MEASUREMENT) SYSTEM APPROVAL, A FLOW CALCULATION PROCEDURE
                    APPROVAL, A FLOW ALLOCATION APPROVAL, AND A TRANSFER METER APPROVAL ....... 12-10
       12-N         APPROVAL TO CONDUCT A FORMATION FLOW TEST ........................................................ 12-11
       12-O         A FLARING OR VENTING OF GAS APPROVAL ................................................................... 12-11
       12-P         A POOLING OR UNITIZATION AGREEMENT (ONLY IF MULTIPLE LAND INTERESTS ARE
                    INVOLVED) .................................................................................................................... 12-12
       12-Q         DECLARATION OF FITNESS ............................................................................................. 12-12
       12-R         ONGOING DIALOGUE WITH THE BOARD .......................................................................... 12-12
       12-S         ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................. 12-12
13.0   WELL OPERATIONS PROGRAM AUTHORIZATION ............................................................... 13-1
       13-1         APPLICATION FOR A WELL OPERATION PROGRAM AUTHORIZATION IS SUBMITTED TO THE
                    BOARD ............................................................................................................................ 13-3
       13-2         APPLICATION REVIEWED BY THE BOARD (POSSIBLE CONSULTATION WITH OTHER
                    AGENCIES) ...................................................................................................................... 13-4
       13-3 & 13-4 BOARD DECISION REGARDING THE ISSUANCE OF A WELL OPERATIONS PROGRAM
                    AUTHORIZATION .............................................................................................................. 13-4
       13-5         APPLICATION FOR AN APPROVAL FOR A WELL OPERATION IS SUBMITTED TO THE BOARD... 13-4
       13-6 TO 13-8 BOARD DECISION REGARDING THE ISSUANCE OF AN APPROVAL FOR A WELL OPERATION .. 13-6
       13-9         POSSIBLE LICENCES, PERMITS, APPROVALS AND AUTHORIZATIONS FROM OTHER
                    REGULATORY AGENCIES .................................................................................................. 13-6
       13-10        CONTINUING OBLIGATIONS .............................................................................................. 13-6
       13-A TO 13-J REQUIREMENTS OF AN APPLICATION FOR A WELL OPERATIONS PROGRAM
                    AUTHORIZATION AND/OR AN APPLICATION FOR AN APPROVAL FOR A WELL OPERATION .... 13-8


viii                                                         Newfoundland and Labrador Offshore Guide – January 2004
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       13-A              OPERATING LICENCE........................................................................................................ 13-8
       13-B              APPROVED CANADA-NEWFOUNDLAND BENEFITS PLAN .................................................... 13-9
       13-C              APPROVED SAFETY PLAN ................................................................................................. 13-9
       13-D              APPROVED ENVIRONMENTAL PROTECTION PLAN .............................................................. 13-9
       13-E              CERTIFICATE(S) OF FITNESS ............................................................................................. 13-9
       13-F              DEVELOPMENT PLAN ..................................................................................................... 13-10
       13-G              PROOF OF FINANCIAL RESPONSIBILITY ........................................................................... 13-10
       13-H              OPERATIONS MANUAL ................................................................................................... 13-10
       13-I              PROGRAM DESCRIPTION ................................................................................................. 13-12
       13-J              DECLARATION OF FITNESS ............................................................................................. 13-12
       13-K              ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................. 13-12
14.0   DECOMMISSIONING WORK AUTHORIZATIONS .................................................................... 14-1
       14-1         APPLICATION FOR A DECOMMISSIONING WORK AUTHORIZATION IS SUBMITTED TO
                    THE BOARD...................................................................................................................... 14-2
       14-2         APPLICATION IS REVIEWED BY THE BOARD (CONSULTATION WITH OTHER AGENCIES) ....... 14-3
       14-3         BOARD DECISION REGARDING THE GRANTING OF A DECOMMISSIONING WORK
                    AUTHORIZATION .............................................................................................................. 14-3
       14-4         POSSIBLE LICENCES, PERMITS, APPROVALS AND AUTHORIZATIONS FROM OTHER
                    REGULATORY AGENCIES .................................................................................................. 14-3
       14-A TO 14-E REQUIREMENTS OF AN APPLICATION FOR A DECOMMISSIONING WORK AUTHORIZATION .... 14-4
       14-A         PLANS TO IMPLEMENT THE DEVELOPMENT PLAN .............................................................. 14-4
       14-B         CERTIFICATE(S) OF FITNESS ............................................................................................. 14-5
       14-C         PROOF OF FINANCIAL RESPONSIBILITY ............................................................................. 14-5
       14-D         PROGRAM DESCRIPTION ................................................................................................... 14-6
       14-E         DECLARATION OF FITNESS ............................................................................................... 14-6
       14-F         ADDITIONAL REQUIREMENTS AS SPECIFIED BY THE BOARD ............................................... 14-6

PART B           AUTHORIZATION PROCESSES OF OTHER REGULATORY AGENCIES

15.0   CEAA ENVIRONMENTAL ASSESSMENT PROCESS.................................................................. 15-1
       15-1          PROJECT DESCRIPTION PROVIDED TO CEAA OR TO A FEDERAL AUTHORITY ...................... 15-1
       15-2          IS THE ACTIVITY A “PROJECT” PURSUANT TO THE CANADIAN ENVIRONMENTAL
                     ASSESSMENT ACT?............................................................................................................. 15-1
       15-3          ACT DOES NOT APPLY ..................................................................................................... 15-3
       15-4          THE ACTIVITY IS A “PROJECT” ......................................................................................... 15-4
       15-5          IS THE PROJECT IN THE EXCLUSION LIST REGULATIONS OR OTHERWISE EXCLUDED? ............ 15-4
       15-6          IS THERE A FEDERAL AUTHORITY?................................................................................... 15-5
       15-7          IS THE FEDERAL EA PROCESS “TRIGGERED” BY A S. 5 FUNCTION?.................................... 15-7
       15-8          CEAA APPLIES AND RESPONSIBLE AUTHORITIES IDENTIFIED ............................................. 15-9
       15-9          TYPE OF ENVIRONMENTAL ASSESSMENT DETERMINED BY REGULATION/RA ................... 15-10
       15-10         COMPREHENSIVE STUDY ................................................................................................ 15-10
       15-11         EA TRACK REPORT TO MINISTER ................................................................................... 15-12
       15-12         MINISTER DETERMINATION OF SCOPE OF EA .................................................................. 15-12
       15-13         COMPREHENSIVE STUDY REPORT TO THE MINISTER AND AGENCY ................................... 15-12
       15-14         AGENCY PREPARES REPORT ........................................................................................... 15-12
       15-15         SCREENING .................................................................................................................... 15-13
       15-16 & 15-17 DETERMINATION BY RESPONSIBLE AUTHORITIES/MINISTER: ANY NEED FOR FURTHER
                     ASSESSMENT?................................................................................................................ 15-13
       15-18         PANEL REVIEWS ............................................................................................................ 15-15
       15-19         MEDIATION ................................................................................................................... 15-16
       15-20         FINAL DETERMINATION BY RESPONSIBLE AUTHORITIES/MINISTER .................................. 15-16
       15-21         PROJECT MAY PROCEED WITH MITIGATION MEASURES IMPLEMENTED ............................ 15-17
       15-22         FOLLOW-UP MITIGATION MEASURES AND PROGRAMS .................................................... 15-17




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16.0   FISHERIES ACT AND NAVIGABLE WATERS PROTECTION ACT AUTHORIZATIONS ......... 16-1
       16-1          APPLICANT PROPOSES DEVELOPMENT INITIATIVES TO DFO HABITAT MANAGEMENT
                     STAFF AND DFO-CCG ..................................................................................................... 16-1
       16-2          DETERMINATION OF WHETHER A SUBSECTION 35(2) FISHERIES ACT AUTHORIZATION IS
                     REQUIRED ....................................................................................................................... 16-3
       16-3 & 16-3-1 IS “FISH HABITAT” PRESENT? IF NOT, SUBSECTION 35(2) AUTHORIZATION NOT
                     REQUIRED ....................................................................................................................... 16-4
       16-4          IS THE PROPOSED UNDERTAKING LIKELY TO RESULT IN A HADD OF FISH HABITAT?......... 16-5
       16-5          CAN HADD BE AVOIDED THROUGH PROJECT RELOCATION, REDESIGN OR MITIGATION? ... 16-6
       16-6          CAN THE IMPACTS BE FULLY MITIGATED? — LETTER OF ADVICE IS ISSUED TO
                     APPLICANT ...................................................................................................................... 16-7
       16-7          SHOULD THE HADD BE AUTHORIZED?............................................................................. 16-7
       16-8          SUBSECTION 35(2) FISHERIES ACT AUTHORIZATION REQUIRED.......................................... 16-8
       16-9          ENVIRONMENTAL ASSESSMENT UNDER CEAA TRIGGERED ................................................ 16-9
       16-10         DETERMINATION OF WHETHER A SUBSECTION 5(1) NWPA FORMAL APPROVAL IS
                     REQUIRED ....................................................................................................................... 16-9
       16-11         IS THE PROPOSAL A WORK? IF NOT, SUBSECTION 5(1) FORMAL APPROVAL NOT
                     REQUIRED ..................................................................................................................... 16-10
       16-12         DOES THE WORK AFFECT NAVIGABLE WATERS? ............................................................ 16-11
       16-13         DOES THE WORK INTERFERE SUBSTANTIALLY WITH NAVIGATION? ................................. 16-11
       16-14         SUBSECTION 5(1) NWPA FORMAL APPROVAL REQUIRED ................................................ 16-11
       16-15         CEAA ENVIRONMENTAL ASSESSMENT PROCESS ............................................................. 16-11
       16-16         DECISION BY CEAA RESPONSIBLE AUTHORITY ............................................................... 16-12
       16-17&16-18 COMPENSATION PLAN DEVELOPED IF COMPENSATION IS A VIABLE OPTION ..................... 16-12
       16-19         SUBSECTION 35(2) FISHERIES ACT AUTHORIZATION ISSUED AND COMPENSATION PLAN
                     FINALIZED ..................................................................................................................... 16-13
       16-20         SUBSECTION 5(1) NAVIGABLE WATERS PROTECTION ACT FORMAL APPROVAL ISSUED ........ 16-13
       16-21         ONGOING OBLIGATIONS ................................................................................................. 16-14
17.0   CEPA, 1999 DISPOSAL AT SEA PERMIT...................................................................................... 17-1
       17-1              APPLICATION TO MINISTER OF THE ENVIRONMENT............................................................ 17-3
       17-2              COMPONENTS OF THE APPLICATION .................................................................................. 17-3
       17-3              PERMIT REVIEW AND CONSULTATION WITH OTHER GOVERNMENT DEPARTMENTS ............. 17-5
       17-4              ENVIRONMENTAL ASSESSMENT UNDER CEAA TRIGGERED ................................................ 17-6
       17-5              PRELIMINARY DECISION BY MINISTER TO ISSUE/REFUSE PERMIT....................................... 17-6
       17-6              PUBLICATION OF PERMIT IN CANADA GAZETTE................................................................. 17-8
       17-7 & 17-8       FINAL DECISION BY MINISTER TO ISSUE/REFUSE PERMIT .................................................. 17-8
       17-9              DISPOSAL AT SEA PERMIT ISSUED WITH CONDITIONS AND DURATION ................................ 17-9
       17-10             MONITORING AND REPORTING REQUIREMENTS ................................................................. 17-9
18.0   TRANSBOUNDARY PIPELINE APPROVALS .............................................................................. 18-1
       18-1              COMMUNITY CONSULTATION BY APPLICANT .................................................................... 18-1
       18-2TO18-4        APPLICATION FOR CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY OR
                         PRELIMINARY SUBMISSION............................................................................................... 18-3
       18-5              ENVIRONMENTAL ASSESSMENT TRACK DETERMINED ....................................................... 18-3
       18-6              COMPREHENSIVE STUDY PROCESS AND REPORT ............................................................... 18-3
       18-7 & 18-8       NEB REGULATORY HEARING — (JOINT) PANEL REVIEW .................................................. 18-4
       18-9TO18-11       PANEL RECOMMENDATIONS ............................................................................................. 18-4
       18-12 TO18-14     DECISION RESULTING FROM ENVIRONMENTAL ASSESSMENT ............................................. 18-5
       18-15 TO18-18     GOVERNOR IN COUNCIL APPROVAL/CERTIFICATE OF PUBLIC CONVENIENCE AND
                         NECESSITY APPROVAL ..................................................................................................... 18-5
       18-19 & 18-20     APPLICANT FILES PLANS, PROFILES AND BOOKS OF REFERENCE........................................ 18-5
       18-21 & 18-22     NEB DETERMINES IF DETAILED ROUTE HEARING REQUIRED ............................................ 18-6
       18-23 & 18-24     NEB DECISION ON PPBORS ............................................................................................ 18-6
       18-25 TO18-27     APPLICATION FOR LEAVE TO OPEN ................................................................................... 18-6



x                                                           Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                                               Table of Contents


19.0   DOMESTIC VESSEL INSPECTION AND CERTIFICATION...................................................... 19-1
       19-1 & 19-2 IS THE VESSEL A FOREIGN-REGISTERED/CANADIAN-REGISTERED NON-DUTY PAID
                     VESSEL?.......................................................................................................................... 19-1
       19-3          IS THE VESSEL TO BE INSPECTED BY TCMS OR THE BOARD? ............................................. 19-1
       19-4 & 19-4-1 TCMS INSPECTION & PAYMENT OF FEES ......................................................................... 19-1
       19-5 & 19-5-1 BOARD INSPECTION, UPON PAYMENT OF FEES .................................................................. 19-3
       19-6          OPERATOR MAY USE VESSEL; MUST CONTINUE TO COMPLY WITH TCMS OR BOARD MARINE
                     SAFETY REQUIREMENTS ................................................................................................... 19-4
       19-7          ONGOING INSPECTIONS OF VESSEL ................................................................................... 19-4
20.0   FOREIGN VESSEL AUTHORIZATIONS ...................................................................................... 20-1
       20-1 & 20-2 IS THE VESSEL A FOREIGN-REGISTERED/CANADIAN-REGISTERED NON-DUTY PAID
                   VESSEL?.......................................................................................................................... 20-3
       20-3        POSSIBLE HELP FROM TRANSPORT CANADA-MARINE SAFETY (TCMS), THE BOARD,
                   AND CTA TO ASSIST IN PLANNING/SCOPING ..................................................................... 20-3
       20-4        APPLICATION TO CTA AND CBSA FOR COASTING TRADE LICENCE ................................... 20-4
       20-5        CTA IDENTIFIES, NOTIFIES AND CONSULTS WITH CANADIAN VESSEL OPERATORS RE:
                   APPLICATION ................................................................................................................... 20-6
       20-6        PLEADINGS SUBMITTED BY OPPOSING PARTY AND APPLICANT .......................................... 20-6
       20-7        CTA DETERMINES AVAILABILITY OF SUITABLE CANADIAN VESSELS ................................ 20-8
       20-8        PROCESS STOPS; POSSIBILITY FOR REVIEW ....................................................................... 20-8
       20-9        CTA COMMUNICATES DECISION TO CBSA, (AND TCMS, HRDC & CIC) ......................... 20-9
       20-10       CBSA ISSUES LETTER TO APPLICANT RE: CONDITIONS FOR COASTING TRADE LICENCE
                   ISSUANCE ........................................................................................................................ 20-9
       20-11       IS THE VESSEL TO BE INSPECTED BY TCMS OR THE BOARD? ............................................. 20-9
       20-12       TCMS INSPECTION AND PAYMENT OF FEES .................................................................... 20-10
       20-13       BOARD INSPECTION AND PAYMENT OF FEES ................................................................... 20-10
       20-14       TCMS OR THE BOARD WILL ADVISE CBSA OF APPROVAL OF VESSEL INSPECTION ......... 20-11
       20-15       DUTIES PAID TO CBSA .................................................................................................. 20-11
       20-16       COASTING TRADE LICENCE ISSUED................................................................................. 20-11
       20-17       ONGOING INSPECTIONS OF VESSEL ................................................................................. 20-12
       20-18       EXTENSION OF COASTING TRADE LICENCE – MUST RESTART PROCESS............................ 20-12
21.0   FOREIGN WORKER AUTHORIZATIONS ................................................................................... 21-1
       21-1              EMPLOYER CONTACTS HRDC/CIC FOR ADVICE ............................................................... 21-1
       21-2 & 21-3       IS EMPLOYMENT CONFIRMATION REQUIRED? ................................................................... 21-1
       21-4              APPLICATION SUBMITTED TO HRDC ................................................................................ 21-3
       21-5              HRDC REVIEWS APPLICATION......................................................................................... 21-3
       21-6              HRDC DECISION TO ISSUE OR REFUSE EMPLOYMENT CONFIRMATION............................... 21-4
       21-7              HRDC EMPLOYMENT CONFIRMATION SENT TO CIC AND HRDC APPROVAL LETTER
                         SENT TO EMPLOYER ......................................................................................................... 21-4
       21-8              DECISION BY CIC TO ISSUE/REFUSE WORK PERMIT BASED ON EMPLOYMENT
                         CONFIRMATION AND OTHER CRITERIA.............................................................................. 21-4
       21-9 & 21-10      FOREIGN WORKERS PERMITTED/NOT PERMITTED TO WORK.............................................. 21-4
       21-1              MONITORING OF CONFIRMATIONS BY HRDC .................................................................... 21-5




Newfoundland and Labrador Offshore Guide – January 2004                                                                                                 xi
Table of Contents



LIST OF APPENDICES

APPENDIX A    -     PRINCIPAL REGULATORY/ADVISORY AGENCIES FOR OIL AND GAS
                    APPROVALS IN THE NEWFOUNDLAND AND LABRADOR OFFSHORE
                    AREA ............................................................................................................................. A-1
                    JOINT FEDERAL-PROVINCIAL REGULATORY AGENCIES ..................................... A-1
                    FEDERAL REGULATORY/ADVISORY AGENCIES .................................................... A-2
                    PROVINCIAL REGULATORY AGENCIES................................................................. A-17
APPENDIX B    -     LIST OF AGENCY CONTACTS.................................................................................. B-1

APPENDIX C    -     REFERENCE MATERIAL ........................................................................................... C-1

APPENDIX D    -     EMERGENCY RESPONSE PLAN PROCEDURES IN THE NEWFOUNDLAND
                    AND LABRADOR OFFSHORE AREA........................................................................ D-1

APPENDIX E    -     OCCUPATIONAL SAFETY AND HEALTH FRAMEWORK IN THE
                    NEWFOUNDLAND AND LABRADOR OFFSHORE AREA...................................... E-1

APPENDIX F    -     COMPENDIUM OF CHARTS...................................................................................... F-1




xii                                                     Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                            Introduction



INTRODUCTION

PURPOSE
The recent surge in oil and gas exploration and development in Atlantic Canada, particularly offshore in
Newfoundland and Labrador and Nova Scotia, has placed new focus on regulatory decision-making procedures
and mechanisms. In particular, since the commencement of offshore production in 1992, many regulatory processes
have been tested for the first time.

The purpose of this Guide is to describe the regulatory processes used to assess and approve applications for oil
and gas industry activities in the Newfoundland and Labrador Offshore Area (the offshore area). It draws on
published sources, such as legislation and regulations, as well as unpublished documents and interviews with
regulators and operators. It is intended for use by operators, regulators and members of the public who are
interested in the regulatory processes governing the oil and gas industry in the offshore area.

While some regulators publish descriptions of their own procedures, these usually focus on a specific mandate,
serve an internal agency purpose, or are intended as general information only. A comprehensive guide to regulatory
procedures — “a Regulatory Road map”— did not exist prior to 2001 to assist government bodies and industry
operators to understand all parts of the regulatory system and its functions, or serve as a common basis for
communications between parties involved in the regulatory process.

Significant industry interest, coupled with new legislation and changing regulatory responsibilities, prompted the
original preparation of this Guide — a single, jointly-sponsored publication that lays out the regulatory procedures
and requirements through the life cycle of oil and gas developments.

It must be emphasized, however, that this Guide does not replace the existing sources of legislation, regulations,
guidelines and policy of the various regulators. Nor does it represent the views or opinions of the various regulators.
Its purpose is simply to provide an overview of the processes and accountabilities for authorizing oil and gas
industry activities in the offshore area. Users of the Guide should seek any specific clarifications and interpretations
from official sources, government regulators or independent counsel.


SCOPE
The Guide is concerned only with the upstream or exploration and production activities undertaken in the offshore area.
Consequently, the regulatory processes examined cover activities ranging from preliminary exploration and
exploration drilling, to development, production and abandonment. In the case of oil, the Guide does not cover
transportation from the offshore location. In the case of gas, the Guide does not cover any onshore operations.

An overview of the life cycle of an offshore oil and gas project helps provide an understanding of the scope of the
regulatory processes outlined in the Guide.

Life Cycle of an Offshore Oil and Gas Project
The formation of oil and gas pools or reservoirs is a complex process that typically evolves over very long periods of
time. It requires a source of hydrocarbon-forming materials (ancient animal and plant remains), adjacent porous
rocks into which hydrocarbons can migrate, and cap rock that traps the hydrocarbons and permits the formation of
an underground pool or reservoir.



Newfoundland and Labrador Offshore Guide – January 2004                                                                   I-1
Introduction


Exploring for oil and gas resources under the ocean floor, particularly in Canada’s offshore environment, is an
expensive and ‘high risk’ (in the commercial sense) business. The chance of finding hydrocarbons in a relatively
unexplored area like offshore Newfoundland and Labrador, after seismic work has been completed, is something in
the range of one in ten. Finding these resources in quantities that justify commercial development is much less
likely.

The practical process of finding oil and gas reserves starts with the work of geologists and geophysicists. Once areas
of potential are identified, such as near the Jeanne d’Arc Basin on the Grand Banks of Newfoundland and
Labrador, or the Sable Basin off Nova Scotia’s coast, “seismic surveys” are undertaken. These surveys generally
use airguns to produce sound waves that can be used to map the geology and stratigraphy below the ocean floor.

On the basis of the knowledge gained from seismic work, companies may wish to acquire the exclusive right to
undertake exploration activity in a particular offshore area. This involves a competitive bidding process
administered by the Canada-Newfoundland Offshore Petroleum Board (CNOPB). The CNOPB awards
Exploration Licences to successful bidders conferring exclusive rights to drill and test for petroleum. License
holders must meet conditions governing industrial benefits and financial investment in exploration to maintain an
Exploration License.

Once exploration rights are issued, the next step is usually more seismic survey work, to better define the potential
drilling targets, or exploratory drilling. Exploratory drilling seeks to verify the prediction that the areas of interest
actually contain oil or gas resources.

If such reserves are found, this usually triggers an application for a Significant Discovery Declaration. At this point
further drilling may be undertaken to better define the reservoir. Ultimately, the license holder may decide to
develop the reservoir as a Commercial Discovery and bring the oil and/or gas to market. To proceed to the
development phase requires the approval of Benefits and Development Plans by the CNOPB. This process
focuses on creating a project that is consistent with best safety and environmental practices, applies sound reservoir
management practices, and maximizes economic benefits to Canadians and Newfoundlanders.

Once a project is approved by way of a Development Plan, construction work can begin. The design and
construction of oil or gas production facilities in the offshore area must comply with all applicable regulations and
guidelines for designing, building, and transporting of equipment and facilities. Completion of construction of the
offshore facility is followed by the actual installation and commissioning of the facility in the offshore location. From
the onset of construction and throughout the life of a project, the Certificate of Fitness Regulations require that an
independent third party or Certifying Authority be involved to provide advice to the Petroleum Board. The
Certifying Authority works with the project Applicant to ensure that the facility is designed, constructed and
maintained to the required standard and that it poses no threat to safety or the environment. Although the
certification process happens in stages, offshore operations cannot commence until such time as the Certifying
Authority has issued a Certificate of Fitness.

Once installed, commissioned and certified, a facility is physically ready to move to final stages of development,
enter the reservoir and begin production by flowing the oil or gas through the well head and to the production
facilities.

Decommissioning and abandonment of facilities and fields is the final phase in the life cycle of an offshore oil and
gas development. Like any other activity in the offshore area, this requires approvals from the CNOPB and other
regulators. The mode of decommissioning and abandonment is addressed first at the Development Plan stage,
before construction begins. The design of fixed platforms must facilitate their ultimate removal from the field, and
the removal must be accomplished without significant impact on the marine environment.


I-2                                               Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                           Introduction


Every activity associated with the life cycle of an oil or gas project, from the acquisition of rights to explore to the
decommissioning of installations and fields, requires authorizations from the CNOPB and a variety of other
regulatory agencies. This regulatory framework reflects the complexity of the environmental and safety issues
inherent in the industry. It also reflects the desire to ensure that the interests of the people of Canada are well
served in the process. This Guide attempts to provide a comprehensive overview of this regulatory framework and
the processes that govern oil and gas industry activities through the life of an offshore project.


Map 1: General Location of the Newfoundland and Labrador Offshore Area




Newfoundland and Labrador Offshore Guide – January 2004                                                               I-3
Introduction


The Newfoundland and Labrador Offshore Area
This Guide applies to the Newfoundland and Labrador Offshore Area under the purview of the Canada-
Newfoundland Offshore Petroleum Board, as defined by Canada and Newfoundland and Labrador statutes: the
Canada-Newfoundland Atlantic Accord Implementation Act (C-NAAIA) and the Canada-Newfoundland Atlantic
Accord Implementation (Newfoundland) Act.1 Appendix A contains a description of the mandate of the CNOPB
in the offshore area.

The offshore area, as defined in the C-NAAIA, refers to those submarine areas lying seaward of the low water
mark on the coast of Newfoundland and Labrador to the outer limits of the continental margin or a distance of 200
nm from the leaselines from which the breadth of the territorial sea of Canada is measured, whichever is greater.
Accordingly, it includes parts of the Grand Banks, the Northeast Newfoundland Basin, the Labrador Shelf, the
Gulf of St. Lawrence and the Laurentian Channel. Map 1 on the previous page shows the location of the
Newfoundland and Labrador Offshore Area.

It should be noted that the legislated definition of the CNOPB’s jurisdiction is not without qualification. Case law,
arbitration decisions and legislation all play a role in defining the limits of the offshore area. First, jurisdiction in the
Gulf of St. Lawrence and Laurentian Channel has been circumscribed by the International Court of Justice in the
Canada-France Maritime Boundary Case.2 In addition, the Province of Newfoundland and Labrador had formally
disputed the offshore jurisdictional boundary between Newfoundland and Labrador and Nova Scotia, as set out
under the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The matter was put
before a three-member arbitration panel which rendered a decision on March 26, 2002. The boundary between
the offshore areas is defined in the Regulations Amending Schedule 1 to the C-NSOPRAIA, May 29, 2003.

Further limits on the CNOPB’s authority may be imposed pursuant to other federal statutes. The Minister of Fisheries
and Oceans may recommend to the Governor in Council that regulations be made to declare a Marine Protected Area
(MPA), wherein petroleum activities may be limited or prohibited, pursuant to subsection 35(3) of the federal Oceans
Act. For example, Gilbert Bay, Labrador and Eastport, Newfoundland have been identified as “Areas of Interest” for
MPAs by Fisheries and Oceans Canada. The Department of Canadian Heritage may establish national marine
conservation areas (MCAs), formerly known as national marine parks, in the offshore area.3 Also, under subsection
4.1(1) of the Canada Wildlife Act,4 the Governor in Council has the authority to designate protected marine areas up to
200 nautical miles from Canadian baselines to protect wildlife and their habitats. Finally, under section 13 of the federal
Marine Conservation Areas Act, the Minister of Canadian Heritage may establish MCAs in which exploration and
exploitation of hydrocarbons would be prohibited.




1
  R.C.S. 1987, c.3, and R.S.N. 1990, c. C-2 respectively [hereinafter, the federal statute will be cited in the Guide and
referred to as C-NAAIA].
2
  (1992) 31 I.L.M. 1145.
3
  See Department of Canadian Heritage, Guiding Principles and Operational Policies (Hull: Minister of Supply & Services
Canada, 1994).
4
  R.S.C. 1985, c. W-9, as am. S.C. 1994, c. 23.


I-4                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                           Introduction


Agencies Involved In Regulating Offshore Activities
In addition to the CNOPB, the following government departments and agencies are involved in the regulatory
processes for offshore oil and gas activities, either as regulators or as reviewers in the process.

Federal Regulatory Agencies
    •    Canada Border Services Agency (CBSA)
    •    Canada Revenue Agency (CRA)
    •    Canadian Environmental Assessment Agency (CEAA)
    •    Canadian Transportation Agency (CTA)
    •    Transportation Safety Board of Canada (TSB)
    •    Citizenship and Immigration Canada (CIC)
    •    Environment Canada (EC)
    •    Fisheries and Oceans Canada (DFO)
    •    Human Resources Development Canada (HRDC)
    •    Industry Canada (IC)
    •    National Defence (DND)
    •    National Energy Board (NEB)
    •    Natural Resources Canada (NRCan)
    •    Transport Canada – Marine Safety (TCMS)

Provincial Regulatory Agencies
    •    Newfoundland and Labrador Department Responsible for Fisheries and Aquaculture
    •    Newfoundland and Labrador Department Responsible Natural Resources
    •    Newfoundland and Labrador Department Responsible for Environment
    •    Newfoundland and Labrador Department Responsible for Labour

A summary of the official mandates of principal regulatory/advisory agencies that have responsibilities in the
Newfoundland and Labrador Offshore Area can be found in Appendix A.

A number of agencies have developed Memoranda of Understanding with the CNOPB that help govern their
relationships with respect to regulation of offshore oil and gas activities. These Memoranda are listed in Appendix C.




Newfoundland and Labrador Offshore Guide – January 2004                                                                  I-5
Introduction


CONTENT AND STRUCTURE OF THE GUIDE
The Guide is designed to be a practical reference tool. It includes:
      •   a consolidated description of the steps in the regulatory processes for the processing of applications for oil
          and gas industry activities;
      •   references to applicable legislation and regulations; and
      •   a description of how regulatory procedures are implemented in practice, including linkages between the
          procedures of different regulatory bodies.

The Guide focuses on the processes leading to issuance of licences, permits and authorizations; it does not provide
guidance on details such as construction standards or specific certification criteria. Although references are made to
the legislation, regulations and guidelines, the full text of these are not reproduced here.

Beyond this Introduction, the Guide has 3 main Parts.
          •   Part A: Authorization Processes of the Offshore Petroleum Board
              Chapters 1 through 14 describe the CNOPB authorization processes for the life of an offshore oil or
              gas project.
          •   Part B: Authorization Processes of Other Regulatory Agencies
              Chapters 15 through 21 describe the roles and responsibilities of other regulatory and review bodies,
              and their respective authorization processes.
          •   Appendices A through F
              Appendix A contains summary descriptions of the Principal Regulatory/Advisory Agencies in the
                         Newfoundland and Labrador Offshore Area.
              Appendix B contains a list of Agency Contacts.
              Appendix C contains a list of Reference Materials.
              Appendix D contains Emergency Response Plan Procedures in the Newfoundland and Labrador
                         Offshore Area.
              Appendix E contains a Summary of the Occupational Safety and Health Framework in the
                         Newfoundland and Labrador Offshore Area.
              Appendix F contains a Compendium of the Guide’s Charts.

Each Chapter in the Guide begins with a flowchart that illustrates the principal steps in each regulatory process,
followed by a corresponding written explanation. The boxes in each flowchart are uniquely numbered, and are
referenced by those same numbers to the written explanations. Within the text, references are made to the
applicable legislation, regulations and guidelines, and to official sources of information.

In the flowcharts, decisions are illustrated with diamond-shaped boxes. Discretionary processes are denoted by a
dashed line. To emphasize the inter-relatedness of the chapters, the flowcharts are cross-referenced to other
flowcharts or text, as required.

Following is an overview of the content of each of the chapters in Parts A and B.




I-6                                               Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                            Introduction


Part A: Authorization Processes of the Offshore Petroleum Board
Part A describes the authorizations required by the Canada-Newfoundland Offshore Petroleum Board to
conduct oil and gas exploration or production activities in the Newfoundland and Labrador Offshore Area.
Chapters are organized in phases that reflect the life cycle of activities from early exploration, to production and
transmission of oil or natural gas. These phases also reflect the manner in which regulatory authorities approach the
review of applications for exploration or development.

                     Chapter Titles                                              Phase Description
Chapter 1        Overview of the CNOPB’s General              A description of the generic process applied by the CNOPB
                 Work Authorization Process                   to issue Work Authorizations.

Chapter 2        Geophysical, Geological, Geotechnical
                 or Environmental Program                     Phase I Work Authorizations Associated with
                 Authorization                                Exploration: the exploration phase is characterized by
Chapter 3        Drilling Program Authorization               activities related to seismic surveys, exploratory drilling
                                                              operations from mobile drilling platforms, and diving
Chapter 4        Approval to Drill a Well                     operations in support of drilling activities.
Chapter 5        Diving Program Authorization

Chapter 6        Exploration Licence
                                                              Phase II Interest Issuance Processes: the licencing
Chapter 7        Significant Discovery Declaration and        requirements for oil and gas activities include the issuance of
                 Significant Discovery Licence                exploration rights based on a bidding process, licencing to
Chapter 8        Commercial Discovery Declaration             hold or develop discoveries of petroleum in commercial
                                                              quantities, and licencing to produce oil or gas.
Chapter 9        Production Licence

Chapter 10       Development Application                      Phase III Development Plan Application:
                                                              development of an oil or gas field requires a detailed
                                                              description in a Development Plan, including public review
                                                              of the project.


Chapter 11       Development Program Authorization            Phase IV Development Drilling and Production:
Chapter 12       Production Operations Authorization          Work Authorizations are required for the fabrication,
                                                              installation, commissioning, and certification of production
Chapter 13       Well Operations Program Authorization        facilities. Development drilling brings oil and gas to the
                                                              production facility and further delineates a reservoir.


Chapter 14       Decommissioning Work Authorizations          Phase V Post-Production: Work Authorizations and
                                                              approvals are required from the CNOPB and other
                                                              regulatory bodies to decommission and/or abandon facilities
                                                              and fields.




Newfoundland and Labrador Offshore Guide – January 2004                                                                 I-7
Introduction


Part B: Authorization Processes of Other Regulatory Agencies
Part B describes the authorization processes and requirements of other regulatory and review agencies.

                   Chapter Titles                                            Chapter Content
Chapter 15       CEAA Environmental Assessment            Federal process for environmental assessments of qualifying
                 Process                                  projects, administered by the Canadian Environmental
                                                          Assessment Agency.

Chapter 16       Fisheries Act and Navigable Waters       Fisheries and Oceans Canada requirements for projects
                 Protection Act Authorizations            with implications for fish habitat or navigable waters.

Chapter 17       CEPA, 1999 Disposal at Sea Permit        Environment Canada requirements for authorizing the
                                                          disposal of any material or substance at sea from a ship,
                                                          aircraft, structure or dredging.

Chapter 18       NEB Transboundary Pipeline               National Energy Board process for authorizing inter-
                 Approvals                                provincial or international subsea pipelines.

Chapter 19       Domestic Vessel Inspection and           TCMS and CNOPB requirements for certifying
                 Certification                            Canadian-registered vessels for use in the offshore oil and
                                                          gas industry.

Chapter 20       Foreign Vessel Authorizations            Process for permitting foreign-registered vessels or a
                                                          Canadian-registered non-duty paid vessels to work
                                                          temporarily in Canadian waters, administered by the
                                                          Canadian Transportation Agency, Canada Border
                                                          Services Agency, TCMS, and CNOPB.

Chapter 21       Foreign Worker Authorizations            Canadian Immigration requirements for authorizing the
                                                          employment of temporary foreign workers in Canada




I-8                                           Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                        Introduction


TERMINOLOGY
As noted above, the Guide draws on a diversity of documents and sources to describe the regulatory processes
governing the oil and gas industry. To minimize confusion, an attempt has been made to adopt the terminology
found in the relevant legislation and regulations. Where appropriate, when these sources do not provide adequate
definitions, terms of art are employed. Every effort is made to define such terms. For easy reference, the following
definitions are provided for some of the technical terms employed in the Guide.

Definitions

“Applicant” for the purposes of this document, means an oil and gas company, or legal agent of a company,
applying for rights to explore for and develop petroleum resources in Newfoundland and Labrador; may be
synonymous with Developer, Operator and Proponent.

“Atlantic Accord” means the Memorandum of Agreement between the Government of Canada and the
Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing.

“Board” means the Canada-Newfoundland Offshore Petroleum Board (as established by the joint operation of
section 9 of the Canada-Newfoundland Atlantic Accord Implementation Act (the C-NAAIA) and section 9 of the
Canada-Newfoundland Atlantic Accord Implementation Newfoundland Act (the C-NAAINA)); Board may also
refer to the National Energy Board (NEB), where the context indicates.

“Developer” means any person carrying out an existing or proposed development. A developer will be an
Applicant requiring a licence, permit or authorization; may be synonymous with Applicant, Operator and
Proponent.

“Development Plan” means a plan submitted pursuant to subsection 139(2) C-NAAIA for the purpose of
obtaining approval of the general approach of developing a pool or field as proposed in the plan.

“environmental assessment” means, in respect of a project, an assessment of the environmental effects of the
project that is conducted in accordance with the Canadian Environmental Assessment Act (CEAA) and its related
regulations (s. 2(1), CEAA).

“environment” means the components of the Earth and includes:
             a) land, water and air, including all layers of the atmosphere;
             b) all organic and inorganic matter and living organisms; and
             c) the interacting natural systems that include components referred to in paragraphs (a) and
                 (b) (s. 2(1), CEAA).
“federal authority” means a Minister of the Crown in right of Canada, an agency of the Government of
Canada, any department or departmental corporation set out in Schedule I or II to the Financial Administration
Act, and any other body that is prescribed pursuant to regulations made under paragraph 59(e), CEAA.

“federal Minister” means the minister of Natural Resources Canada.

“fundamental decision” means a decision made by the Board respecting the exercise of a power or the
performance of a duty pursuant to a provision of the C-NAAIA or C-NAAINA that expressly provides for the
exercise of the power or the performance of the duty subject to sections 31 to 40 (as defined in each Act).

“gas” means natural gas and includes all substances, other than oil, that are produced in association with natural
gas.


Newfoundland and Labrador Offshore Guide – January 2004                                                           I-9
Introduction


“government” means the Federal Government, the Provincial Government or both, as the context requires.

“impact on the environment” means any effect on land, water air or any other component of the environment,
and includes any effect on the social and cultural environment or on heritage resources.

“Newfoundland” for the purposes of this Guide should be considered to mean Newfoundland and Labrador.

“Operator” this is the term used in numerous CNOPB documents to denote the person or company who
proposes an operation; may be synonymous with Applicant, Developer and Proponent.

“project” means:
                 a) in relation to a physical work, any proposed construction, operation, modification,
                    decommissioning, abandonment or other undertaking in relation to that physical work, or
                 b) any proposed physical activity not relating to a physical work that is prescribed or is within a
                    class of physical activities that is prescribed pursuant to regulations made under paragraph
                    59(b). (s. 2(1), CEAA).

“Proponent” for the purposes of this document, means a person, body or company who proposes a development
or production activity. May be synonymous with Applicant, Developer and Operator.

“provincial Minister” means the Minister of the Crown in right of Newfoundland and Labrador, pursuant to a
Provincial Act, by the Provincial Government as the responsible minister for the purpose of the Provincial Act.

“regulatory agency” in relation to a development, means a body or person responsible for issuing a licence,
permit or other authorization required for the development under any federal or provincial law.

“Responsible Authority” means a federal authority that is required pursuant to subsection 11(1), CEAA to
ensure that an environmental assessment of the project is conducted.

“responsible minister” in relation to a proposal for a development, means any minister of the Crown in right of
Canada, or of the provincial government, having jurisdiction in relation to the development (or some aspect of the
development) under federal or provincial law.




I-10                                           Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                  Introduction




Abbreviations
ADW               Approval to Drill a Well
AOI               Area of Interest

CA                Certifying Authority
CBSA              Canada Border Services Agency
CCG               Canadian Coast Guard
CCO               Chief Conservation Officer
CRA               Canada Revenue Agency
CD                Commercial Discovery
CDA               Commercial Discovery Area
CDD               Commercial Discovery Declaration
CEAA              Canadian Environmental Assessment Act
CEAA              Canadian Environmental Assessment Agency
CEPA, 1999        Canadian Environmental Protection Act, 1999
CIC               Citizenship & Immigration Canada
C-NAAIA           Canada-Newfoundland Atlantic Accord Implementation Act
C-NAAINA          Canada-Newfoundland Atlantic Accord Implementation Newfoundland Act
CNOPB             Canada-Newfoundland Offshore Petroleum Board
C-NOPRAIA         Canada-Newfoundland Offshore Petroleum Resources Accord Implementation Act
CNSOPB            Canada-Nova Scotia Offshore Petroleum Board
COGOA             Canada Oil and Gas Operations Act
COF               Certificate of Fitness pursuant to Certificate of Fitness Regulations under the Canada-
                  Newfoundland Atlantic Accord Implementation Newfoundland Act
CPRA              Canada Petroleum Resources Act
CSO               Chief Safety Officer
CTA               Canadian Transportation Agency

DCBC              Diver Certification Board of Canada
DFO               Fisheries and Oceans Canada
DFO-CCG           Fisheries and Oceans Canada (DFO) - Canadian Coast Guard (CCG)
DND               Department of National Defence
DPA               Drilling Program Authorization

EA                Environmental Assessment pursuant to the various legislation and guidelines (including
                  CEAA and C-NOPRAIA)
EC                Environment Canada
EIA               Environmental Impact Assessment under CEAA
EIS               Environmental Impact Statement
EL                Exploration Licence
EMR               Energy, Mines and Resources Canada (now known as Natural Resources Canada)
EPP               Environmental Protection Plan
ESRF              Environmental Studies Research Fund
ESSIM             Eastern Scotian Shelf Integrated Management Project

FA                federal authority



Newfoundland and Labrador Offshore Guide – January 2004                                                     I-11
Introduction




GN&L           Government of Newfoundland & Labrador, also referred to as the provincial government
GSC            Geological Survey of Canada

HADD           Harmful Alteration Disruption or Destruction of Fish Habitat
HO             Hearing Order
HRDC           Human Resources Development Canada

IC             Industry Canada
ICSAR          Inter-departmental Committee on Search & Research

MCA            Marine Conservation Area, pursuant to Bill C-8, Marine Conservation Areas Act
MODU           Mobile Offshore Drilling Unit
MOU            Memorandum of Understanding
MPA            Marine Protected Area, pursuant to the Oceans Act

NEAC           Newfoundland Environmental Advisory Committee
NEB            National Energy Board
NEB Act        National Energy Board Act
NLDNR          Newfoundland and Labrador Department of Natural Resources, Energy Branch
nm             Nautical Mile
NOAPPC         Newfoundland Offshore Area Petroleum Production and Conservation Regulations
NRCan          Natural Resources Canada
NWP            Navigable Waters Program
NWPA           Navigable Waters Protection Act.

OGC            Oil and Gas Committee

PHC            Pre-Hearing Conference
POA            Production Operations Authorization
PL             Production Licence
PPBOR          Plans, Profiles and Books of Reference

RA             Responsible Authority
REET           Regional Environmental Emergency Team
ROV            Remotely Operated Vehicles

SAR            Search and Rescue
SD             Significant Discovery
SDA            Significant Discovery Area
SDD            Significant Discovery Declaration
SDL            Significant Discovery Licence
SEIS           Socio-economic Impact Study
SOLAS          Safety of Life at Sea Convention

TCMS           Transport Canada - Marine Safety
TSB            Transportation Safety Board of Canada




I-12                                    Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                          Introduction


PRINCIPAL ACTS AND REGULATIONS GOVERNING OIL AND GAS ACTIVITIES

Joint Federal - Provincial Acts, Regulations and Guidelines


             Acts                    Regulating                                     Web Site
                                      Agencies

Canada-Newfoundland Atlantic      Canada-Newfoundland   www.cnopb.nfnet.com
Accord Implementation Act,        Offshore Petroleum
Chapter C-7.5 (1987, c.3).        Board                 http://laws.justice.gc.ca/en/C-7.5/index.html

Canada-Newfoundland Atlantic      Canada-Newfoundland   http://www.gov.nf.ca/hoa/sr/
Accord Implementation             Offshore Petroleum
Newfoundland Act, R.S.N.          Board                 www.cnopb.nfnet.com
1990 Chapter C-2.

Hibernia Development Project      Canada-Newfoundland   http://laws.justice.gc.ca/en/H-3.7/index.html
Act, Chapter H-3.7 (1990,         Offshore Petroleum
c.41).                            Board                 www.cnopb.nfnet.com



        Regulations                  Regulating                                     Web Site
                                      Agencies

Canada-Newfoundland Oil and       Canada-Newfoundland   http://laws.justice.gc.ca/en/c-7.5/sor-88-262/text.html
Gas Spills and Debris Liability   Offshore Petroleum
Regulations, SOR/88-262.          Board                 www.cnopb.nfnet.com

Hibernia Development Project      Canada-Newfoundland   http://laws.justice.gc.ca/en/h-3.7/sor-90-774/text.html
Offshore Applications             Offshore Petroleum
Regulations, SOR/90-774.          Board                 www.cnopb.nfnet.com

Newfoundland Offshore Area        Canada-Newfoundland   http://laws.justice.gc.ca/en/c-7.5/sor-88-347/text.html
Oil and Gas Operations            Offshore Petroleum
Regulations, SOR/88-347.          Board                 www.cnopb.nfnet.com

Newfoundland Offshore Area        Canada-Newfoundland   http://laws.justice.gc.ca/en/c-7.5/sor-88-601/text.html
Petroleum Diving Regulations,     Offshore Petroleum
SOR/88-601.                       Board                 www.cnopb.nfnet.com

Newfoundland Offshore Area        Canada-Newfoundland   http://laws.justice.gc.ca/en/c-7.5/sor-95-334/text.html
Petroleum Geophysical             Offshore Petroleum
Operations Regulations,           Board                 www.cnopb.nfnet.com
SOR/95-334.
Newfoundland Offshore Area        Canada-Newfoundland   http://laws.justice.gc.ca/en/C-7.5/SOR-95-103/text.html
Petroleum Production and          Offshore
Conservation Regulations,         Petroleum Board       www.cnopb.nfnet.com
SOR/95-103.



Newfoundland and Labrador Offshore Guide – January 2004                                                           I-13
Introduction



        Regulations                    Regulating                                      Web Site
                                        Agencies

Newfoundland Offshore Area         Canada-Newfoundland       http://laws.justice.gc.ca/en/C-7.5/SOR-88-263/text.html
Registration Regulations,          Offshore
SOR/88-263.                        Petroleum Board           www.cnopb.nfnet.com

Newfoundland Offshore              Canada-Newfoundland       http://laws.justice.gc.ca/en/C-7.5/SOR-95-100/text.html
Certificate of Fitness             Offshore
Regulations, SOR/96-435.           Petroleum Board           www.cnopb.nfnet.com

Newfoundland Offshore              Canada-Newfoundland       http://laws.justice.gc.ca/en/C-7.5/SOR-93-23/text.html
Petroleum Drilling Regulations,    Offshore
SOR/93-23.                         Petroleum Board           www.cnopb.nfnet.com

Newfoundland Offshore              Canada-Newfoundland       http://laws.justice.gc.ca/en/C-7.5/SOR-95-104/text.html
Petroleum Installations            Offshore
Regulations, SOR/95-104.           Petroleum Board           www.cnopb.nfnet.com

The Petroleum Occupational         Canada-Newfoundland
Safety and Health Regulations,     Offshore                  Contact CNOPB directly
Newfoundland (Draft                Petroleum Board
November 1989)



                      Guidelines                              Regulating Agencies                      Web Site

“Certificate of Fitness Guidelines,” October 2001.            CNOPB/CNSOPB                  http://www.cnopb.nfnet.com/

“Compensation Guidelines Respecting Damages Relating          CNOPB                         Contact CNOPB directly
to Offshore Petroleum Activity,” March 2003.

“Development Application Guidelines,” December 1998.          CNOPB                         www.cnopb.nfnet.com

“Exploration Benefits Plan Guidelines: Schedule IV to call    CNOPB                         www.cnopb.nfnet.com
for Bids No. NF00-1”.

“Geophysical, Geological, Environmental and Geotechnical      CNOPB                         www.cnopb.nfnet.com
Program Guidelines,” January 2004.

“Guidelines for the Reporting and Investigation of Safety     CNOPB                         www.cnopb.nfnet.com
Related Incidents,” September 2002.

“Guidelines Respecting Drilling Programs in the               CNOPB                         www.cnopb.nfnet.com
Newfoundland Offshore Area,” January 2000.

“Guidelines Respecting Financial Responsibility               CNOPB                         www.cnopb.nfnet.com
Requirements for Work or Activity in the Newfoundland
and Nova Scotia Offshore Areas,” May 1999.




I-14                                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                        Introduction



                       Guidelines                             Regulating Agencies                  Web Site

“Guidelines Respecting Monthly Production Reporting for       CNOPB                     http://www.cnopb.nfnet.com/
Producing Fields in the Newfoundland and Labrador
Offshore Area,” September 2001.

“Guidelines Respecting Physical Environmental Programs        CNOPB/NEB/CNSOPB          http://www.neb-
During Petroleum Drilling and Production Activities on                                  one.gc.ca/publications/index_e.ht
Frontier Lands,” April 1994. (Joint with NEB and                                        m
CNSOPB)                                                                                 www.cnopb.nfnet.com

“Guidelines Respecting the Selection of Chemicals             CNOPB/NEB/CNSOPB
Intended to be Used in Conjunction with Offshore Drilling                               Contact CNOPB directly
& Production Activities on Frontier Lands,” January
1999. (Joint with NEB and CNSOPB)

“Joint Guidelines Regarding Applications for Significant or   CNOPB/CNSOPB              http://www.cnopb.nfnet.com/
Commercial Discovery Declarations and Amendments,”
May 2003.

“Joint Guidelines Respecting Data Acquisition and             CNOPB/CNSOPB              www.cnopb.nfnet.com
Reporting for Well, Pool and Field Evaluations in the
Newfoundland and Nova Scotia Offshore Areas,” June
2003. Joint with CNSOPB.

“Measurement Guidelines,” October 2003                        CNOPB/CNSOPB              http://www.cnopb.nfnet.com

“The Newfoundland Offshore Area Registration System           CNOPB                     www.cnopb.nfnet.com
Guidelines,” January 1994.

“Newfoundland Offshore Area Guidelines for Drilling           CNOPB                     www.cnopb.nfnet.com
Equipment,” March 1993.

“Offshore Waste Treatment Guidelines,” August 2002.           CNOPB/CNSOPB              www.cnopb.nfnet.com

“Safety Plan Guidelines,” September, 2002.                    CNOPB                     www.cnopb.nfnet.com


Federal Acts and Regulations


                Acts                       Regulating Agencies                             Web Site

Canada Labour Code, R.S. 1985,          Minister of Labour             http://laws.justice.gc.ca/en/L-2/index.html
c. L-2.

Canada Oil and Gas                      National Energy Board          http://laws.justice.gc.ca/en/O-7/index.html
Operations Act, R.S.C. 1985,
c. O-7, re-en. S.C. 1992, c. 35.

Canada Petroleum Resources Act,         National Energy Board          http://laws.justice.gc.ca/en/C-8.5/index.html
R.S.C. 1985, c. 36 (2nd Supp.).




Newfoundland and Labrador Offshore Guide – January 2004                                                              I-15
Introduction



               Acts                      Regulating Agencies                               Web Site

Canada Shipping Act, re-en. R.S.C.     Transport Canada                http://laws.justice.gc.ca/en/S-9/index.html
1985, c. 3 (3rd Supp.), amended
November 2001.

Canada Wildlife Act, R.S.C. 1985, c.   Canadian Wildlife Service       http://laws.justice.gc.ca/en/W-9/index.html
W-9, as am. S.C. 1994, c. 23.

Canadian Environmental                 Canadian Environmental          http://laws.justice.gc.ca/en/C-15.2/index.html
Assessment Act, S.C. 1992, c. 37, as   Assessment Agency
am. S.C. 1994, c. 46.

Canadian Environmental                 Environment Canada              http://laws.justice.gc.ca/en/C-15.31/index.html
Protection Act, S.C. 1999, c. 33.

Canadian Transportation Accident       Canadian Transportation         http://laws.justice.gc.ca/en/C-23.4/index.html
Investigation Safety Board Act,        Accident Investigation Safety
R.S.C. 1985, c. C-23.4.                Board

Coasting Trade Act, S.C. 1992,         Canada Border Services Agency   http://laws.justice.gc.ca/en/C-33.3/index.html
c. 31.
                                       Canadian Transportation
                                       Agency

Customs Act, R.S.C. 1985, c.1          Canada Border Services Agency   http://laws.justice.gc.ca/en/C-52.6/index.html
(2nd supplement).

Energy Administration Act. R.S.C.      National Energy Board           http://laws.justice.gc.ca/en/E-6/index.html
1985, c. E-6.

Fisheries Act, R.S.C. 1985, c. F-14.   Department of Fisheries and     http://laws.justice.gc.ca/en/F-14/index.html
                                       Oceans Canada

Immigration and Refugee Protection     Citizenship and Immigration     http://laws.justice.gc.ca/en/i-2.5/text.html
Act, R.S.C. 1985, c. I-2.              Canada

Marine Conservation Areas Act,         Minister of Canadian Heritage   http://laws.justice.gc.ca/en/C-7.3/18062.html
R.S.C. 2002, c. 18.

Migratory Birds Convention Act,        Environment Canada              http://laws.justice.gc.ca/en/M-7.01/index.html
1994, 2001, c. 27.

National Energy Board Act, R.S.C.      National Energy Board           http://laws.justice.gc.ca/en/N-7/index.html
1985, c. N-7.

Navigable Waters Protection Act,       Canadian Coast Guard,           http://laws.justice.gc.ca/en/N-22/index.html
R.S.C. 1985, c. N-22.                  Department of Fisheries and
                                       Oceans Canada

Oceans Act, S.C. 1996, c. 31.          Department of Fisheries and     http://laws.justice.gc.ca/en/O-2.4/index.html
                                       Oceans Canada



I-16                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                            Introduction



                Acts                     Regulating Agencies                                  Web Site

Radiocommunication Act, R.S.C.         Industry Canada                    http://laws.justice.gc.ca/en/R-2/index.html
1985, c. R-2.

Species at Risk Act,                   Minister of Canadian Heritage      http://laws.justice.gc.ca/en/s-15.3/index.html
                                       Minister of Fisheries and Oceans
                                       Minister of Environment



           Regulations                   Regulating Agencies                                  Web Site

Federal Authorities Regulations,       Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-96-
SOR/96-280, as am.                     Assessment Agency                  280/index.html
SOR/DORS/2001-44.

Projects Outside Canada                Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-96-
Environmental Assessment               Assessment Agency                  491/index.html
Regulations, SOR/ 96-491.

Comprehensive Study List Regulations   Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-94-
Oil and Gas Projects, SOR/94-638,      Assessment Agency                  638/index.html
as am. SOR/2003-282 and
SOR/2003-352.

Consolidated Regulations under the     Canadian Environmental             http://www.ceaa.gc.ca/013/act_e.htm
Canadian Environmental Assessment      Assessment Agency
Act, Inclusion List, Exclusion List,
Comprehensive Study List, Law List,
amended November 1999.

Crewing Regulations, SOR/97-390.       Transport Canada                   http://laws.justice.gc.ca/en/S-9/SOR-97-
                                                                          390/index.html

Disposal at Sea Regulations,           Environment Canada                 http://laws.justice.gc.ca/en/c-15.31/sor-2001-
SOR/2001-275.                                                             275/text.html

Exclusion List Regulations, as am.     Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-94-
November 4, 1999, SOR/99-437, as       Assessment Agency                  639/index.html
am. SOR/2003-350.

Federation Coordination Regulations,   Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-97-
SOR/97-181.                            Assessment Agency                  181/index.html

Inclusion List Regulations, as am.     Canadian Environmental             http://laws.justice.gc.ca/en/C-15.2/SOR-94-
November 4, 1999, SOR/99-436, as       Assessment Agency                  637/index.html
am SOR/2003-280 and SOR/2003-
349.




Newfoundland and Labrador Offshore Guide – January 2004                                                                 I-17
Introduction



          Regulations                     Regulating Agencies                            Web Site

Law List Regulations, as am. July 28,   Canadian Environmental        http://laws.justice.gc.ca/en/C-15.2/SOR-94-
1999 and November 4, 1999,              Assessment Agency             636/index.html
SOR/99-330, SOR/99-438 as am.
SOR/2003-281 and SOR/2003-
351.

Load Line Regulations (Sea), C.R.C.     Transport Canada              http://laws.justice.gc.ca/en/S-9/C.R.C.-
c. 1441                                                               c.1441/index.html

Marine Occupational Safety and          Transport Canada              http://laws.justice.gc.ca/en/L-2/SOR-87-
Health Regulations, SOR/87-183.                                       183/index.html

Oil and Gas Occupational Safety and     National Energy Board         http://laws.justice.gc.ca/en/L-2/SOR-87-
Health Regulations SOR/87-612.                                        612/index.html

Regulations Respecting Applications     Environment Canada            http://laws.justice.gc.ca/en/C-15.31/SOR-2001-
for Permits for Disposal at Sea,                                      276/index.html
SOR/2001-276.



           Guidelines                     Regulating Agencies                            Web Site

“Ministerial Guideline, Canadian        Canadian Environmental        http://www.ceaa-
Environmental Assessment Act,”          Assessment Agency             acee.gc.ca/013/0001/0007/panelpro_e.htm
s. 58(1)(a), Procedures for an
Assessment by a Review Panel,
November 1997.

“Fish Habitat Conservation and          Department of Fisheries and   http://www.dfo-mpo.gc.ca/canwaters-
Protection — Guidelines for             Oceans Canada                 eauxcan/infocentre/guidelines-
Attaining No Net Loss” (Ottawa:                                       conseils/guides/fhmcons/habita_e.asp
DFO, 1995).

“Guidelines Respecting Coasting         Canadian Transportation       http://www.cta-otc.gc.ca
Trade Licence Applications,” August     Agency
2003.

M.M. Gosse, A.S. Power, D.E.            Department of Fisheries and   http://www.dfo-mpo.gc.ca/canwaters-
Hyslop & S.L. Pierce, “Habitat          Oceans Canada                 eauxcan/infocentre/guidelines-
Conservation and Protection                                           conseils/guides/fhmguide/index_e.asp
Guidelines,” 2nd ed. (Ottawa: DFO,
1998).




I-18                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                     Introduction


Provincial Acts


               Acts                     Regulating Agencies                             Web Site

Environmental Protection Act, S.N.    Newfoundland and Labrador      http://www.gov.nf.ca/hoa/statutes/e14-2.htm
2000, c. E-14.2, as amended May       Department of Labour
2002.

Labour Relations Act, R.S.N. 1990,    Newfoundland and Labrador      http://www.gov.nf.ca/hoa/statutes/l01.htm
c. L-1, as amended.                   Labour Relations Board

Labour Standards Act, R.S.N. 1990,    Newfoundland and Labrador      http://www.gov.nf.ca/hoa/statutes/l02.htm
c. L-2, as amended.                   Department of Labour

Occupational Health and Safety Act,   Newfoundland and Labrador      www.gov.nf.ca/hoa/statutes/o03.htm
R.S.N. 1990, c. 0-3.                  Department of Labour

Petroleum and Natural Gas Act,        Newfoundland and Labrador      http://www.gov.nf.ca/hoa/statutes/p10.htm
R.S.N. 1999, c. P-10.                 Department of Natural
                                      Resources

Workplace Health, Safety and          Workplace Health, Safety and   http://www.whscc.nf.ca/legislation.htm
Compensation Act, R.S.N. 1990, c.     Compensation Commission
W-11, amended 2001




Newfoundland and Labrador Offshore Guide – January 2004                                                          I-19
Introduction




Notes




I-20           Newfoundland and Labrador Offshore Guide – January 2004
                                                             1 – CNOPB’s General Work Authorization Process




              1.0 CNOPB’s GENERAL WORK AUTHORIZATION PROCESS

              Chapter 1 describes the General Work Authorization Process of the Canada-Newfoundland
              Offshore Petroleum Board (CNOPB or the Board) for the Newfoundland and Labrador Offshore
              Area. Chart 1 presents an illustration of these procedures. The processes associated with specific
              Work Authorizations are described in subsequent chapters.

              Pursuant to subsection 137(b) of the Canada-Newfoundland Atlantic Accord Implementation Act
              (C-NAAIA), any work or activity associated with oil and gas exploration, development, or production
              in the Newfoundland and Labrador offshore area requires a Work Authorization from the CNOPB.

              Although the details and technical issues associated with each Work Authorization differ
              considerably, there are certain aspects of the Authorization process that are common to all. For
              example, pursuant to subsection 138(4) of the C-NAAIA, all Work Authorizations are subject to
              such approvals as the Board determines or may be issued in accordance with the regulations and such
              requirements and deposits as the Board determines or as may be prescribed, including:
                  •    requirements relating to liability for loss, damage, costs or expenses;
                  •    requirements for the carrying out of environmental programs or studies; and
                  •    requirements for the payment of expenses incurred by the Board in approving the design,
                       construction and operation of production facilities and production platforms, as those terms
                       are defined in the regulations.

              There is also a provision in the Act to ensure that the Board consider the safety of the work or activity
              by reviewing, in consultation with the Chief Safety Officer, the system as a whole and its components,
              including its structures, facilities, equipment, operating procedures and personnel (s. 138.2,
              C-NAAIA).

              Among the most commonly sought Work Authorizations are: Geophysical, Geological, Geotechnical
              or Environmental Program Authorizations (Chapter 2), Drilling Program Authorizations
              (Chapter 3), Diving Program Authorizations (Chapter 5), Production Operations Authorizations
              (Chapter 12), and Well Operation Program Authorizations (Chapter 13).

              Authorizations are also required for work activities that are associated with the construction,
              installation and commissioning of production installations, and for decommissioning and
              abandonment. The required Board approvals associated with these phases are discussed in Chapters
              11(Development Program Authorization) and 14 (Decommissioning/Abandonment). Since the
              activities undertaken during these phases vary considerably from one project to another, the specific
              Work Authorization requirements are normally determined in accordance with the unique
              characteristics of each project.




Newfoundland and Labrador Offshore Guide – January 2004                                                            1-1
1 – CNOPB’s General Work Authorization Process




1-2                                       Newfoundland and Labrador Offshore Guide – January 2004
                                                                1 – CNOPB’s General Work Authorization Process


               This chapter is intended to serve primarily as a reference and should not be taken as a substitute for
               more specific chapters. For information about the requirements of a specific Work Authorization,
               Applicants are advised to consult the corresponding chapter. Applicants are also advised to consult
               any relevant CNOPB documents to ensure they have satisfied all requirements.


1-1            Application for a Work Authorization is Submitted to the Board
               The Operator initiates the process by applying for an Authorization from the Board. Each
               application must be accompanied by one or more copies of the designated CNOPB application
               form(s). These forms are available from the CNOPB office in St. John’s.

               In addition to the submission of application forms, there are a number of other requirements that must
               be satisfied before an Authorization will be issued. The requirements associated with a Work
               Authorization application vary, depending on the nature of the Authorization being sought. Several
               components are, however, common to most Authorizations. These include the obtaining and/or
               submitting of:
                   •    an Operating Licence (1-A);
                   •    a Canada-Newfoundland Benefits Plan (1-B);
                   •    a Safety Plan (1-C);
                   •    an Environmental Assessment (1-D);
                   •    Certificate(s) of Fitness (1-E);
                   •    Proof of Financial Responsibility (1-F);
                   •    Program Description (1-G);
                   •    a Declaration of Fitness (1-H); and
                   •    additional requirements as specified by the CNOPB (1-I).

               These requirements are described in sections 1-A through 1-I, at the end of this chapter.

               The ways in which these requirements are satisfied may depend on whether or not the Work
               Authorization is sought before or after a Development Application (Chapter 10) has been approved
               by the Board. For Work Authorizations that precede the approval of a Development Application, the
               requirements for a Canada-Newfoundland Benefits Plan, a Safety Plan, and an Environmental
               Protection Plan will be satisfied on an activity or program-specific basis. For Work Authorizations
               that follow the approval of a Development Application and the approval of a Development Plan, new
               plans may not be required.5 This is because, as part of the Development Application, Applicants are
               required to submit a comprehensive Benefits Plan, as well as preliminary Safety and Environmental
               Protection Plans which may address all subsequent activities.

               Under some circumstances, the Board may allow the Applicant to substitute alternative procedures
               for a required regulation through what is known as the Regulatory Query Form (RQF) process.




               5
                Notable exceptions exist with respect to diving and geophysical, geological, geotechnical and environmental
               programs. Even if such programs are carried out after a Development Application is approved, Applicants will
               often be required to submit new plans which address the unique characteristics of these activities.


 Newfoundland and Labrador Offshore Guide – January 2004                                                                1-3
 1 – CNOPB’s General Work Authorization Process


               Pursuant to subsection 151(1) of the C-NAAIA, the Chief Safety Officer and Chief Conservation
               Officer may:
               a) authorize the use of … standards in lieu of any required regulation, where … the use of that
                  other … standards would provide a level of safety … equivalent to that provided by compliance
                  with the regulations; or
               b) issue an exemption from any regulatory requirement in respect of … standards, where those
                  Officers are satisfied with the level of safety, protection of the environment and conservation that
                  will be achieved without compliance with that requirement.

               If these provisions are invoked, the Applicant must provide the Board with sufficient documentation
               for the Board to understand what is being proposed, why it is being proposed and the rationale for the
               proposed action. When approval of the use of alternate codes, standards or requirements is being
               requested, supporting documentation should include a statement of concurrence from the Certifying
               Authority.


1-2            Application is Reviewed by the Board in Consultation with Other
               Agencies
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. On issues relating to fisheries and
               environment, the Board typically notifies and/or consults with the members of the Newfoundland
               Environmental Advisory Committee (NEAC).

               This group consists of:
                   •    members of the CNOPB staff;
                   •    Fisheries and Oceans Canada;
                   •    Environment Canada;
                   •    Natural Resources Canada;
                   •    the Newfoundland and Labrador Department Responsible for Natural Resources;
                   •    the Newfoundland and Labrador Department Responsible for Fisheries and Aquaculture;
                        and
                   •    the Newfoundland and Labrador Department Responsible for Environment6.

               For matters relating to Canada-Newfoundland Benefits Plans, the Board typically notifies and may
               seek input from:
                   •    Natural Resources Canada;
                   •    Human Resources Development Canada;
                   •    the Atlantic Canada Opportunities Agency;
                   •    Industry Canada;
                   •    the Newfoundland and Labrador Department Responsible for Natural Resources;
                   •    the Newfoundland and Labrador Department Responsible for Industry, Trade and
                        Technology;

               6
                The Newfoundland Department of Environment is generally notified of any significant developments, but
               would rarely assume an active consulting role. Their greatest involvement would come in issues of land-based
               waste disposal, unless there were onshore construction activities associated with a project, in which case normal
               provincial jurisdiction would apply.


 1-4                                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                              1 – CNOPB’s General Work Authorization Process


                   •    the Newfoundland and Labrador Department Responsible for Human Resources and
                        Employment; and
                   •    the Newfoundland and Labrador Department Responsible for Education.


1-3 & 1-4      Board Decision Regarding the Acceptability of the Canada-
               Newfoundland Benefits Plan
               Prior to making a decision regarding the issuance of a Work Authorization associated with
               exploration, the Board must first approve the Applicant’s Canada-Newfoundland Benefits Plan (see
               also 1B below).

               If the Benefits Plan is considered to be unsatisfactory, the process stops and the plan may be revised
               and resubmitted for another review. If the Benefits Plan is considered to be acceptable, the Board will
               consider approving the Work Authorization request. In practice, Benefits Plan approval is subject to
               conditions placed on that approval by the Board.

               The federal Minister of Natural Resources and the provincial Minister responsible for Energy may
               jointly issue written directives to the Board in relation to the Canada-Newfoundland Benefits Plan
               and any provisions thereof (s. 42(1)(d), C-NAAIA).

               For work programs that occur after a Development Application has been approved over the same
               area, an approved Benefits Plan will already be in place. In these situations, the Applicant is not
               required to submit another Benefits Plan. Rather, it is expected that the existing Benefits Plan will
               have addressed all benefits matters relating to the program.


1-5 to 1-7     Board Decision Regarding the Granting of a Work Authorization
               Once the Board has reviewed the Work Authorization application and consulted with other agencies,
               as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply. If the Board approves
               the application, and any additional requirements have been satisfied, the Work Authorization will be
               issued and the program may proceed.


1-8            Licences, Permits and Authorizations From Federal or Provincial
               Agencies May be Required
               In addition to the requirements of the Board, and depending on the nature of the activity or project,
               Applicants may be required to obtain licences, permits, approvals or authorizations from federal
               agencies. These may include:
                   •    a CEAA Determination (Chapter 15);
                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a CEPA, 1999 Disposal at Sea Permit (Chapter 17);
                   •    a Transport Canada Vessel Certification (Chapter 19);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);


 Newfoundland and Labrador Offshore Guide – January 2004                                                             1-5
 1 – CNOPB’s General Work Authorization Process


                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               Provincial authorizations may be required in circumstances where there is a bridging of offshore and
               onshore activities, for example, in Western Newfoundland and Labrador. In such circumstances,
               Applicants should contact the Newfoundland and Labrador Department of Natural Resources for
               advice on onshore authorization requirements.

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all of these
               approvals have been obtained.


1-9            Continuing Obligations
               After the Authorization is issued, the Operator will be subject to continuing obligations. In addition
               to complying with all procedural requirements, Operators are expected to satisfy a variety of approval,
               reporting and submission requirements. These consist of ongoing requirements that must be satisfied at
               regular intervals throughout the program, as well as operational requirements, that must only be
               satisfied under specific circumstances.


1-A to 1-I     Requirements of an Application for a Work Authorization
               There are a number of additional requirements that are likely to be associated with the seeking of a
               Work Authorization. While not all of these requirements need to be satisfied when the application is
               first submitted to the Board, all must be in place before the Authorization will be issued. They are
               described in sections 1-A through 1-I. As mentioned, this is not an exhaustive list of Work
               Authorization requirements. It is merely an attempt to capture the general requirements that are
               common to most Work Authorization applications.


1-A            Operating Licence
               An Operating Licence is required for any Applicant who plans to conduct activities related to the
               exploration for, or the development of oil and gas in the Newfoundland and Labrador offshore
               (s. 137(a), C-NAAIA). An Operating Licence may be obtained by submitting an application to the
               Board. Pursuant to subsection 4(2) of the Newfoundland Offshore Area Oil and Gas Operations
               Regulations, every application for an Operating Licence shall:
                   •    be in writing;
                   •    contain the name and address of the Applicant;
                   •    be sent to the Chief Conservation Officer; and
                   •    be accompanied by a fee of $25 payable to the Receiver General.

               Barring intervention by the Board, the Licence is valid until the March 31st after the date of issuance,
               at which point it may be renewed for successive periods of no more than one year at a time
               (s. 138(2), C-NAAIA). If the Applicant already holds a valid Operating Licence, a new one will not
               have to be obtained for each Work Authorization application.



 1-6                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                             1 – CNOPB’s General Work Authorization Process


               Most often, Applicants append an Operating Licence to the application for a Work Authorization.
               In certain cases, however, particularly where the corporation applying for Authorization is not
               incorporated in Canada, the process of obtaining an Operating Licence may be rather time
               consuming. In these situations, it may be advisable for the Applicant to submit the other requirements
               of the application first, and then follow them with the Operating Licence, once it is obtained.
               While this procedure may shorten the amount of time required to process the application, a program
               of work may not commence until the Applicant has obtained the Operating Licence.
               To ensure legal accountability, an Operating Licence may only be issued to a single individual or
               corporation, but will not be issued to a partnership between two or more parties (s. 3, Newfoundland
               Offshore Area Oil and Gas Operations Regulations).

               If a licence is issued by the Board, it is subject to such requirements as the Board determines or as
               may be prescribed, and to such fees and deposits as are prescribed, (s. 138(3), C-NAAIA) and to
               the provisions of the Newfoundland Offshore Area Oil and Gas Operations Regulations. In addition,
               pursuant to subsection 138(5) of the C-NAAIA, the licence may be suspended or revoked for failure
               to comply with, contravention of or default in respect of:
                   •   a requirement, approval, fee or deposit subject to which licence was issued;
                   •   a requirement undertaken in a declaration referred to in subsection 139.1(1) of the
                       C-NAAIA;
                   •   subsection 139.1(3), 139.2(2) or 163(1.1) of the C-NAAIA; or
                   •   any applicable regulation.


1-B            Canada-Newfoundland Benefits Plan
               Before issuing any Work Authorization, the Board must first approve a Canada-Newfoundland
               Benefits Plan that relates to the proposed work or activity.

               A Canada-Newfoundland Benefits Plan is defined as: “a plan for the employment of Canadians
               and, in particular, members of the labour force of the province and, subject to paragraph 45(3)(d) of
               the C-NAAIA, for providing manufacturers, consultants, contractors and service companies in the
               province and other parts of Canada with a full and fair opportunity to participate on a competitive
               basis in the supply of goods and services used in any proposed work or activity referred to in the
               Benefits Plan” (s. 45(1), C-NAAIA).

               All Benefits Plans must contain provisions to ensure that:
                   •   an office is established in the province where appropriate levels of decision-making are to take
                       place;
                   •   consistent with the Canadian Charter of Rights and Freedoms, individuals resident in the
                       province shall be given first consideration for training and employment in the work program
                       for which the plan was submitted (collective agreements should contain provisions consistent
                       with this paragraph);
                   •   expenditures shall be made for research and development to be carried out in the province
                       and for education and training to be provided in the province; and
                   •   first consideration shall be given to services provided from within the province and to goods
                       manufactured in the province, where those services and goods are competitive in terms of fair
                       market price, quality and delivery (ss. 45(3)(a)-(d), C-NAAIA).




 Newfoundland and Labrador Offshore Guide – January 2004                                                           1-7
 1 – CNOPB’s General Work Authorization Process


               The Board may further require that any Canada-Newfoundland Benefits Plan include provisions to
               ensure that disadvantaged individuals or groups have access to training and employment opportunities
               and to enable such individuals or groups to participate in the supply of goods and services used in any
               proposed work or activity referred to in the Benefits Plan (s. 45(4), C-NAAIA).

               Canada-Newfoundland Benefits Plans may take one of two forms. To cover exploratory activities,
               such as geophysical work and/or exploration drilling, the Board will require an Exploration Benefits
               Plan. These Benefits Plans are often less extensive, because the size of the workforce employed by
               one of these operations is considerably smaller than the workforce employed by construction or
               production operations. The Board’s publication “Exploration Benefits Plan Guidelines:
               Newfoundland Offshore Area,” sets out the key elements to be included in an Exploration Benefits
               Plan.

               For development and production activities, a more comprehensive Benefits Plan is required in order
               to address the application of the legislative provisions to the engineering, procurement, construction
               and operating phases of such projects. This Benefits Plan is required to be submitted as a part of the
               Development Application. The requirements of a Canada-Newfoundland Benefits Plan for a
               Development Application are described in the Board’s “Development Application Guidelines,”
               Chapter 5.

               The Operator should maintain ongoing consultations with the Board, and any other government
               agencies that the Board considers to be appropriate, during the preparation of a Benefits Plan. The
               Board also requires that the Operator provide effective monitoring and reporting of procurement
               decisions and reporting of expenditure and employment levels to ensure that the requirements of the
               Benefits Plan are being adhered to throughout each stage of the project.

               Although the Board retains the authority to waive the requirement for a Benefits Plan, this has never
               occurred in practice.


1-C            Safety Plan
               Before a Work Authorization will be issued, the Applicant must demonstrate to the Board that steps
               have been taken to ensure the safety of all works and activities. Pursuant to section 138.2 of the
               C-NAAIA, the Board, in consultation with the Chief Safety Officer, must consider the safety of the
               work or activity by reviewing the system as a whole and each of its components, including its
               structures, facilities, equipment, operating procedures and personnel.

               To facilitate this process, those applying for a Work Authorization are expected to submit a Safety
               Plan to the Board. This plan is to demonstrate that a systematic approach to safety management will
               be in place throughout the program and to describe how safety management, including the co-
               ordination of the safety management programs of the major contractors, fits within the overall
               management of the program. The Board expects Operators to identify all hazards associated with the
               program and to ensure that appropriate measures are in place to control them.

               The specific requirements of a Safety Plan may vary depending on the types of Authorizations being
               sought and whether or not a Development Plan has been approved by the Board. For exploratory
               activities, which usually occur prior to the submission and approval of a Development Plan, the Board
               will require Safety Plans that focus exclusively on the program for which an Authorization is being


 1-8                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                             1 – CNOPB’s General Work Authorization Process


              sought. Specific Safety Plan requirements associated with geophysical or geotechnical programs that
              require fieldwork are outlined in section 3.1.2 of the Board’s “Geophysical, Geological,
              Environmental and Geotechnical Program Guidelines.” Safety Plan requirements associated with
              exploratory and delineation drilling programs are outlined in sections 4.7 and 4.8 of the “Guidelines
              Respecting Drilling Programs in the Newfoundland Offshore Area.” The safety requirements
              associated with diving programs are described in the Newfoundland Offshore Area Petroleum Diving
              Regulations.

              Safety concerns for Work Authorizations associated with development, production, and
              decommissioning activities are dealt with under a larger and more comprehensive Safety Plan, which
              is usually submitted as part of the Development Application. The Board recognizes that not all
              safety-related concerns will have fully developed by the time that this application is submitted. Thus,
              the Operator may simply be asked to target the main hazards associated with the proposed
              development through a “Concept Safety Analysis,” and augment the existing plan as new activities
              are undertaken and new procedures develop. The Concept Safety Analysis is to include a definition
              of situations and conditions and of the changes in operating procedures and practices that would
              require it to be updated (s. 43(5)(g), Newfoundland Offshore Petroleum Installations Regulations).

              A final Safety Plan must be approved before a Production Operations Authorization (POA) will be
              issued. Pursuant to subsection 51(1) of the Newfoundland Offshore Area Petroleum Production and
              Conservation Regulations, the final Safety Plan should provide:
                  •    a description of the corporate safety management policy and procedures that will be
                       implemented to minimize personnel injuries, equipment damage and production losses;
                  •    a discussion of the procedures that the Applicant plans to put forward in order to best
                       identify and minimize or eliminate hazards to the health and occupational safety of workers
                       in the production and transportation system. It should also demonstrate that the Applicant
                       intends to establish a plan to satisfy the requirements of the Petroleum Occupational Safety
                       and Health Regulations, Newfoundland (Draft November 1989), which closely parallel
                       those in the Oil and Gas Occupational Safety and Health Regulations of the Canada Labour
                       Code;
                  •    a description of the training and qualifications required for each classification of production
                       installation, transportation system, and standby vessel personnel;
                  •    a description of the equipment and procedures that the Applicant will use to monitor and forecast
                       conditions in the physical environment and to integrate those efforts with those of public sector
                       agencies and other operators;
                  •    operational procedures put in place to enable workers to respond to situations which threaten
                       the safety of personnel or the installation; and
                  •    descriptions of the safety related provisions included in the design of the facilities and of
                       specific safety equipment.

              Detailed information about the preparation of Safety Plans for development and production activities
              can be found in the “Safety Plan Guidelines.”

              All Safety Plans must comply with the Petroleum Occupational Safety and Health Regulations,
              Newfoundland (Draft November 1989) and, where applicable, with certain provisions of
              Newfoundland and Labrador social legislation and/or Transport Canada’s Marine Occupational
              Safety and Health Regulations. See Appendix E of this Guide for a discussion of the applicability of
              these various occupational safety and health regulations in the Newfoundland and Labrador offshore



Newfoundland and Labrador Offshore Guide – January 2004                                                             1-9
1 – CNOPB’s General Work Authorization Process


              area. As drilling vessels and vessels used to conduct geophysical operations are not permanently
              anchored to, resting on, or attached to the seabed or subsoil, provincial social legislation does not
              apply. Procedures and equipment aboard the vessel must, however, be in compliance with the
              Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November 1989) and
              with the Marine Occupational Safety and Health Regulations. Where vessels are permanently
              anchored or resting on the seabed or subsoil, provincial labour legislation applies.

              Emergency Response Plan and Oil Spill Response Plan
              Before the Board will issue a Work Authorization, it must first review one or more Emergency
              Response Plans (ERPs) to cover the installations being used in the operation. The purpose of these
              plans is to define procedures which ensure that agencies exercising authority in the offshore area are
              kept apprised of developments related to emergency situations in a timely and efficient manner. The
              plans should also define the procedures by which the Operator may respond to emergency situations.

              An Emergency Response Plan must address all abnormal conditions and emergencies that can
              reasonably be anticipated, including but not limited to:
                  •    serious injury, persons overboard or loss of life;
                  •    collisions;
                  •    loss of well control;
                  •    forecast or actual physical environmental conditions that may result in loads or load effects on
                       an installation in excess of those for which it was designed;
                  •    oil spills;
                  •    fire and/or explosion;
                  •    loss or damage to a support craft;
                  •    loss or damage to other installations on the field;
                  •    relief well drilling arrangements; and
                  •    acts by any person or threats to commit acts that may be hazardous; and
                  •    diving emergencies.

              For production and drilling installations, where the likelihood of an oil spill is greater, the Oil Spill
              Response Plan may be submitted as a separate document.

              Operators must also specify the procedures to keep the Board apprised during alert and emergency
              situations. The Board’s publication “Canada-Newfoundland Offshore Petroleum Board Emergency
              Response Plan, September 1, 1999” describes the procedures followed by the Board in coordinating
              activities with external government agencies in relation to these plans. These processes are
              summarized in Appendix D of this Guide.

              It is generally accepted that Emergency Response Plans and Oil Spill Response Plans will be
              modified as more information about the project becomes available. Changes can be Operator induced
              or the result of Board/Operator consultations during the issuance/re-issuance of Work Authorizations.




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                                                            1 – CNOPB’s General Work Authorization Process


1-D            Environmental Assessment
               Activities that require an authorization by the Board are subject to environmental assessment pursuant
               to the Canadian Environmental Assessment Act. The CNOPB is a federal authority under CEAA
               and generally the lead Responsible Authority for environmental assessments of proposals requiring a
               CNOPB authorization. The Applicant will generally be required to seek advice from the Board on
               scope of the environmental assessment and preparation of an Environmental Impact Statement (EIS)
               and Environmental Protection Plan (EPP). The level of detail of the EIS/EPP depends upon the
               type and magnitude of the project, requirements of the CEAA where applicable and the potential
               environmental effects. However, an EIS is generally expected to include:
                   •   details of the proposed energy source to be used;
                   •   a description of substances which will be discharged into the marine environment during the
                       normal course of operations;
                   •   details of fishing activities that are ongoing in the area of the fieldwork; and
                   •   plans for co-ordinating the program with fishing interests in the area.

               An EIS for any project that may have significant impact on the environment or fishing industry will be
               forwarded to the FEAC for examination.

               The EPP sets out the measures proposed by the Applicant in order to protect the environment.
               Pursuant to section 51(2) of the Board’s Newfoundland Offshore Area Petroleum Production and
               Conservation Regulations, an EPP associated with development and production activities is to
               include:
                   •   a description of the program established to monitor and the measures adopted to minimize or
                       mitigate the effect on the natural environment of routine operations on a production
                       installation;
                   •   contingency plans for response to, and mitigation of, the accidental spill of petroleum or
                       hazardous substances;
                   •   a description of equipment and procedures for treatment, handling and disposal of waste
                       material;
                   •   compliance monitoring programs to ensure that the composition of spilled waste material is in
                       accordance with the limits specified in the Environmental Protection Plan;
                   •   a summary of the chemical substances intended for use in operations and maintenance on the
                       production installation; and
                   •   plans for environmental restoration of the production site following termination of production.

               Environmental protection planning must also conform to the criteria relating to chemical selection as
               outlined in the Board’s “Offshore Chemical Selection Guidelines,” and the waste disposal measures,
               as outlined in the Board’s “Offshore Waste Treatment Guidelines.”

               Although a comprehensive conceptual EPP that covers all development and production activities is
               usually submitted along with the Applicant’s Development Application, formal approval of the plan is
               not required until a Production Operations Authorization is sought.

               Operations that occur during the development or production phases of a project will generally be
               subject to a CEAA Screening to ensure that the provisions to protect the environment have been
               addressed in the comprehensive environmental assessment submitted as part of the Development
               Application. (see Chapter 15 of the Guide for more details).


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 1 – CNOPB’s General Work Authorization Process


1-E            Certificate(s) of Fitness
               Pursuant to subsection 139.2 (1) of the C-NAAIA, no Work Authorization shall be issued with
               respect to any prescribed equipment or installation, or any equipment or installation of a prescribed
               class, unless the Applicant submits to the Board a Certificate of Fitness issued by a Certifying
               Authority (CA). The text of the certificate will be reviewed and approved by the Board.

               The four organizations recognized by the Board as Certifying Authorities are: the American Bureau
               of Shipping, Bureau Veritas, Det norske Veritas Classification A/S and Lloyd’s Register of
               Shipping (s. 2, Newfoundland Offshore Certificate of Fitness Regulations).

               Pursuant to subsection 139.2 (3) of the C-NAAIA, the Certificate of Fitness must state that the
               equipment or installation:
               a) is fit for the purposes for which it is to be used and may be operated safely without posing a threat
                  to persons or to the environment in the location and for the time set out in the certificate; and
               b) is in conformity with all of the requirements and conditions that are imposed for the purposes of
                  this section by subsection 138(4) of the C-NAAIA, whether they are imposed by regulation or by
                  the Board or the CA.

               Types of installations that are considered to require Certificates of Fitness include: production
               installations, drilling installations, accommodations installations and diving installations. If two or
               more of these features are combined in one installation (such as a production installation with a built
               in diving installation), the Board may choose to accept one Certificate of Fitness for both elements of
               the installation. The criteria to be used by CAs in assessing the fitness of an installation is described
               in section 4 of the Newfoundland Offshore Certificate of Fitness Regulations. In addition, the Board
               will ensure that the installation is in compliance with the Petroleum Occupational Safety and Health
               Regulations, Newfoundland (Draft November 1989). This will also be considered in the evaluation
               of the Applicant’s Safety Plan.

               Applicants are required to permit the CA to have access to the equipment and installations in
               question, and to any information that relates to them. (s. 139.2(5), C-NAAIA). It is also expected
               that the Applicant will assist the CA in carrying out necessary inspections, tests or surveys and will
               submit an inspection and monitoring program, a maintenance program and a weight control program
               to the CA for approval (s. 4(8)(a), Newfoundland Offshore Certificate of Fitness Regulations).

               The CA develops the scope of work in consultation with the Operator. For the purposes of issuing a
               Certificate of Fitness in respect of an installation, the CA will submit the scope of work to the Board’s
               Chief Safety Officer for approval. The Chief Safety Officer, in turn, is authorized to approve the
               scope of work, and permit the issuing of the Certificate of Fitness if it is determined that the scope of
               work meets the conditions specified in section 6 of the Board’s Newfoundland Offshore Certificate of
               Fitness Regulations. Documentation associated with the Certificate of Fitness is generally provided by
               the acting CA rather than by the Board.

               If the Certificate of Fitness is issued, it will be valid for five years from the date of issuance. If,
               however, the CA determines that, when the installation is maintained in accordance with the
               programs submitted to it, the installations will not meet all necessary requirements for five years, but
               will meet those requirements for a lesser period, the CA may adjust the expiration date of the
               certificate accordingly (s. 7, Newfoundland Offshore Certificate of Fitness Regulations).



 1-12                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                              1 – CNOPB’s General Work Authorization Process


              Once an Authorization has been issued, Operators must ensure that a Certificate of Fitness remains
              in force for as long as the equipment or installations identified by the Certificate are used in relation to
              the Authorization in question (s. 139.2(2), C-NAAIA). It is expected that the Operator will ensure
              that the platform remains in compliance with the CA-approved maintenance inspected weight control
              program. The Board is not liable to any person by reason of having issued an Authorization on the
              basis of a Certificate of Fitness (s. 139.2(7), C-NAAIA).

              Certificates of Fitness are subject to additional requirements, as specified in section 139.2 of the
              C-NAAIA and the Newfoundland Offshore Certificate of Fitness Regulations. Discussions are
              currently underway to create joint guidelines respecting Certificates of Fitness procedures in
              Newfoundland and Nova Scotia. This could bring about a situation in which the same Certificate of
              Fitness would be valid in both jurisdictions.

              In addition, pursuant to subsection 193.2(1) of the C-NAAIA, every holder of a Work Authorization
              for which a prescribed installation is used must appoint an Installation Manager to be in command of
              the installation. New managers need not be appointed if managers are already in place for all
              installations used in the program. The manager assumes responsibility for safety at the installation and
              has the power to do such things as are required to ensure the safety of the installation and the persons
              at it. More particularly, the manager may:
                  •    give orders to any person who is at the installation;
                  •    order that any person who is at the installation be restrained or removed; and
                  •    obtain any information or documents.

              In a prescribed emergency situation, an Installation Manager’s powers are extended so that they also
              apply to each Operator of a vessel, vehicle or aircraft that is at the installation or that is leaving or
              approaching it. The manager must meet any qualifications that are prescribed by the Board.


1-F           Proof of Financial Responsibility
              Pursuant to subsection 163(1) of the C-NAAIA, an application for a Work Authorization in respect
              of any work or activity in any portion of the offshore area shall provide Proof of Financial
              Responsibility in the form of a letter of credit, a guarantee or indemnity bond or in any other form
              satisfactory to the Board, in an amount satisfactory to the Board. Once the Authorization is issued,
              the holder of the Authorization must ensure that Proof of Financial Responsibility remains in force
              for the duration of the activity (s. 163(1.1), C-NAAIA). In submitting Proof of Financial
              Responsibility, the Applicant is expected to provide one copy of the “Proof of Financial
              Responsibility” form to the Board.

              The basic objectives of the Proof of Financial Responsibility include:
                  •    providing financial compensation to any party respecting claims attributable to the work or
                       activity. These would include without limitation, claims by third parties, the Crown or its
                       agents, the Board, including the Chief Conservation Officer and Board delegates. Eligible
                       claims would include those relating to loss of or damage to property, financial loss, or
                       injury/death;
                  •    restoring and preserving of the natural environment, including the sea bed, while the work or
                       activity is going on and after it is completed and abandoned; and




Newfoundland and Labrador Offshore Guide – January 2004                                                             1-13
 1 – CNOPB’s General Work Authorization Process


                   •    ensuring that the Operator will properly terminate the authorized work or activity, having
                        regard to environmental, safety and other concerns (s. 3, “Guidelines Respecting Financial
                        Responsibility Requirements For Work or Activity in the Newfoundland and Nova Scotia
                        Offshore Areas”).

               For any drilling or producing activity, there is an absolute liability placed on each Operator with
               respect to any occurrence involving a “spill” or “debris,” as defined in the C-NAAIA. The liability is
               absolute because it does not require a claimant to prove fault or negligence by the operator, but simply
               to establish that the spill or debris is attributable to that particular work or activity. In addition to
               being liable for reasonable costs and expenses incurred by the Board or governments in taking
               remedial clean-up action respecting a spill or debris, the Operator would also be liable for costs and
               expenses arising from the Chief Conservation Officer taking over the management or control of
               operations where a spill occurs (ss. 161(4), 161(7) and 161(7.1), C-NAAIA).

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization.

               Further requirements regarding the submission of Proof of Financial Responsibility for specific Work
               Authorizations are detailed in the “Guidelines Respecting Financial Responsibility Requirements
               For Work or Activity in the Newfoundland and Nova Scotia Offshore Areas.”


1-G            Program Description
               Although it is not a formal regulatory requirement, the Board requires Applicants to submit a
               Program Description with every application for a Work Authorization. It should provide a detailed
               outline of the aims and objectives of the proposed program and any relevant supporting
               documentation. Applicants should consult with the Board to determine the form that the summary
               should take.


1-H            Declaration of Fitness
               Pursuant to subsection 139.1(1) of the C-NAAIA, no Work Authorization shall be issued until the
               Board has received a Declaration of Fitness from the Applicant. This declaration, in the form
               prescribed by the Board, must be signed by a senior officer of the corporation seeking the
               Authorization. It states that:
                   •    the equipment and installations that are to be used in the work or activity to be authorized
                        are fit for the purposes for which they are to be used, the operating procedures relating to
                        them are appropriate for those uses, and the personnel who are to be employed in connection
                        with them are qualified and competent for their employment; and
                   •    the Applicant shall ensure, so long as the work or activity that is authorized continues, that
                        the equipment and installations will continue to be fit for the purposes for which they are
                        used, the operating procedures continue to be appropriate for those uses, and the personnel
                        continue to be so qualified and competent.

               The Board may accept a Declaration from the owner of the equipment in lieu of a Declaration from
               the Applicant for the operation (s. 139.1(2), C-NAAIA).


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                                                             1 – CNOPB’s General Work Authorization Process



               Applicants are required to use the equipment installations, procedures and personnel qualifications as
               described in the Declaration unless a change in the equipment, installations, procedures or personnel
               qualifications is first approved in writing by the Board Chairman.

               In practice, the Declaration of Fitness is only submitted to the Board when all other requirements
               have been fulfilled. If a significant departure from the Declaration is made, the holder of the
               Authorization is expected to submit a new Declaration to the Board as soon as possible (s. 139.1(3),
               C-NAAIA).

               Pursuant to the provisions of the Petroleum Occupational Safety and Health Regulations,
               Newfoundland (Draft November 1989), the execution of the Declaration of Fitness form places the
               onus on the Operator to ensure the health and safety of personnel. The Board expects Operators to
               exercise due diligence prior to signing the Declaration and during the execution of the program.

               The Board is not liable to any person by reason of having issued an Authorization on the basis of a
               Declaration of Fitness (s. 139.1(4), C-NAAIA).


1-I            Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




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1 – CNOPB’s General Work Authorization Process



Notes




1-16                                      Newfoundland and Labrador Offshore Guide – January 2004
                                                                  2 – Geophysical, Geological, Geotechnical or
                                                                         Environmental Program Authorization

              2.0 GEOPHYSICAL, GEOLOGICAL, GEOTECHNICAL OR
                  ENVIRONMENTAL PROGRAM AUTHORIZATION

              Chapter 2 describes the steps followed in the issuance of a Geophysical, Geological, Geotechnical, or
              Environmental Program Authorization, for the Newfoundland and Labrador Offshore Area. Chart 2
              illustrates these procedures.

              An Authorization is required before the Board will permit the Applicant to conduct a geophysical,
              geological, geotechnical or environmental program in the Newfoundland and Labrador Offshore
              Area.

              “Geophysical” work is defined as:
                       work involving the indirect measurement of the physical properties of rocks in order to
                       determine the depth, thickness, structural configuration or history of deposition thereof and
                       includes the processing, analysis and interpretation of material or data obtained from such
                       work logs (s. 119(1), C-NAAIA).

              A “geophysical operation” is defined specifically as:
                       the measurement or investigation, by indirect methods, of the subsurface of the earth for the
                       purpose of locating petroleum or of determining the nature of the seabed and subsurface
                       conditions at a proposed drilling site or of a proposed pipeline route, and includes a seismic
                       survey, resistivity survey, gravimetric survey, magnetic survey, electrical survey and
                       geochemical survey and any work preparatory to that measurement or investigation, such as
                       field tests of energy sources, calibration of instruments and cable ballasting, but does not
                       include a velocity survey or a vertical seismic survey that is not a walkaway vertical seismic
                       survey (s. 2, Newfoundland Offshore Area Petroleum Geophysical Operations Regulations).

              “Geological” work is defined as:
                       work, in the field or laboratory, involving the collection, examination, processing or other
                       analysis of lithological, paleontological or geochemical materials recovered from the seabed or
                       subsoil of any portion of the offshore area and includes the analysis and interpretation of
                       mechanical well logs (s. 119(1), C-NAAIA).

              “Geotechnical” work is defined as:
                       work, in the field or laboratory, undertaken to determine the physical properties of materials
                       recovered from the seabed or subsoil of any portion of the offshore area (s. 119(1),
                       C-NAAIA).

              “Environmental” study is defined as:
                       work pertaining to the measurement or statistical evaluation of the physical, chemical and
                       biological elements of the lands, oceans or coastal zones, including winds, waves, tides,
                       currents, precipitation, ice cover and movement, icebergs, pollution effects, flora and fauna
                       both onshore and offshore, human activity and habitation of any related manners (s. 119(1),
                       C-NAAIA).



Newfoundland and Labrador Offshore Guide – January 2004                                                           2-1
2 – Geophysical, Geological, Geotechnical or
Environmental Program Authorization




2-2                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                   2 – Geophysical, Geological, Geotechnical or
                                                                          Environmental Program Authorization

               The activities requiring the Geophysical, Geological, Geotechnical or Environmental Program
               Authorization include both field and laboratory work. The most common examples of field work are
               two-dimensional and three-dimensional surveying. Other examples include: well site surveys,
               aeromagnetic surveys, geochemical/remote sensing surveys, the use of reflection seismographs,
               gravimeters, and airborne magnetometers and subsurface analysis. Such work may precede or follow
               the issuance of an Exploration Licence (see Chapter 6 for licence issuance process).Therefore, the
               procedures outlined below apply to holders of an exploration licence for specific parcels, as well as to
               non-holders or “speculative” geological, geophysical operators.

               The processes relating to the issuance of a Geophysical, Geological, Geotechnical, or Environmental
               Program Authorization are set out in the C-NAAIA and in the various CNOPB regulations,
               requirements and guidelines, including:
                   •    Newfoundland Offshore Area Petroleum Geophysical Operations Regulations;
                   •    “Geophysical, Geological, Environmental and Geotechnical Program Guidelines - Draft,
                        January 2004;”
                   •    the Newfoundland Offshore Area Petroleum Diving Regulations;
                   •    the Newfoundland Offshore Petroleum Installations Regulations;
                   •    the Newfoundland Offshore Certificate of Fitness Regulations;
                   •    the Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft
                        November 1989);
                   •    the “Safety Plan Guidelines;” and
                   •    the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                        the Newfoundland and Nova Scotia Offshore Areas.”

               This chapter is only a summary of requirements. Applicants are advised to consult the
               aforementioned documents to ensure they have satisfied all of the requirements set out by the
               CNOPB.


2-1            Application for a Geophysical, Geological, Geotechnical or
               Environmental Program Authorization Submitted to the Board
               The Applicant initiates the process by applying for a Work Authorization from the Board. Pursuant
               to sections 3 and 4 of the Newfoundland Offshore Area Petroleum Geophysical Operations
               Regulations, applications must be submitted to the Board a minimum of 40 days in advance of the
               proposed commencement date for a program. Also, if chemical explosives are planned as a marine
               seismic energy source, the application must be made at least 90 days in advance of the proposed
               commencement date.
               The application process begins with the forwarding of two signed copies of the
               “Geophysical/Geological/Geotechnical/Environmental Program Authorization Application” form to
               the Board. Programs that do not require field work are applied for by forwarding two signed copies of
               the “Geophysical/Geological Program Approval (For Programs Without Field Work) Application”
               form to the Board. These forms are available from the CNOPB office in St. John’s.

               Each application must also be accompanied by the following items:
                   •    a copy of a location map showing the position of the proposed program and lines in relation
                        to the land interests to which the program applies;



 Newfoundland and Labrador Offshore Guide – January 2004                                                            2-3
 2 – Geophysical, Geological, Geotechnical or
 Environmental Program Authorization

                    •    a copy of a page-size map showing the location of the program area in relation to adjacent
                         coastlines and other geographical features and boundaries; and
                    •    a copy of the resume of the principal contractor.

                In addition to the submission of these documents, there are a number of other requirements that must
                be satisfied before an Authorization will be issued. These include the obtaining and/or submitting of:
                    •    an Operating Licence (2-A);
                    •    a Canada-Newfoundland Benefits Plan (2-B);
                    •    a Safety of Plan (2-C);
                    •    an Environmental Assessment (2-D);
                    •    Proof of Financial Responsibility (2-E);
                    •    a Program Description (2-F);
                    •    a Declaration of Fitness (2-G); and
                    •    additional requirements as specified by the Board (2-H).

                These requirements are described in sections 2-A through 2-H, at the end of this chapter. Programs
                that do not involve field work (such as those consisting solely of laboratory work) may not require all
                of these elements. They will, however, still be required to address Canada-Newfoundland Benefits
                concerns and to submit an overall description of the proposed program.

                The environmental assessment for a proposed technical program must be submitted at least 90 days in
                advance of the proposed activity commencement date.


2-2             Application Reviewed by the Board (Consultation with Other
                Agencies)
                The Board conducts an internal review of the various components of the application. Input from other
                government agencies is generally sought as part of this process. The agencies that are typically
                consulted by the Board in reviewing an application for a Work Authorization are listed in section 1-2.


2-3 to 2-4      Board Decision Regarding the Acceptability of the Canada-
                Newfoundland Benefits Plan
                Prior to making a decision regarding the issuance of a Work Authorization in support of an
                exploratory geophysical, geological, geotechnical or environmental program, the Board must first
                approve the Applicant’s Canada-Newfoundland Benefits Plan (see also 2-B below). If the Benefits
                Plan is considered to be unsatisfactory, the process stops and the plan may be revised and resubmitted
                for another review. If the Benefits Plan is considered to be acceptable, the Board will consider
                approving the Work Authorization request.

                The federal Minister of Natural Resources and the provincial Minister of Mines and Energy may
                jointly issue written directives to the Board in relation to the Canada-Newfoundland Benefits Plan,
                and any provisions thereof (s. 42(1)(d), C-NAAIA).

                For exploration activities that occur after a Development Application has been approved over the
                same area, an approved Benefits Plan will already be in place. In these situations, the Applicant is



 2-4                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                    2 – Geophysical, Geological, Geotechnical or
                                                                           Environmental Program Authorization

               not required to submit another Benefits Plan. It is expected that the existing Benefits Plan will have
               addressed all benefits matters relating to the activity, although some additional information is required
               as per the guidelines.


2-5 to 2-7     Board Decision Regarding the Issuance of a Geophysical,
               Geological, Geotechnical or Environmental Program Authorization
               Once the Board has reviewed the Work Authorization application and consulted with other agencies,
               as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply for the Authorization. If
               the Board approves the application, and any additional requirements have been satisfied, the Work
               Authorization will be issued and the activity may proceed. The Authorization will remain in place for
               a maximum period of six months from the time that it is issued.


2-8            Possible Licences, Permits, Approvals and Authorizations From
               Other Regulatory Agencies
               In addition to the requirements of the Board, and depending on the nature of the project, Applicants
               may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
               may include:
                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a Transport Canada Domestic Vessel Inspection and Certification (Chapter 19);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);
                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); or
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all applicable
               approvals have been obtained.


2-9            Continuing Obligations
               After the Work Authorization is issued, the Applicant is subject to continuing obligations. These
               consist of a) ongoing requirements, which must be satisfied at regular or pre-determined intervals
               throughout the program, and b) operational requirements, which must only be satisfied under specific
               circumstances.

               Ongoing Requirements
               Ongoing requirements for geophysical, geological, geotechnical or environmental programs include:
                   •    submitting weekly progress reports during the program;
                   •    reporting of accidents, hazardous occurrences and significant events (including any contacts
                        with fishing gear);


 Newfoundland and Labrador Offshore Guide – January 2004                                                             2-5
 2 – Geophysical, Geological, Geotechnical or
 Environmental Program Authorization

                    •   submitting monthly safety statistics;
                    •   assisting inspection visits by safety officers designated by the Board;
                    •   training personnel to be employed in geophysical operations;
                    •   submitting a final report, along with data, within 12 months following termination of the field
                        work;
                    •   the compliance with reporting requirements that are unique to specific types of programs, as
                        described in section 5 of the “Geophysical, Geological, Environmental and Geotechnical
                        Program Guidelines;” and
                    •   submitting of benefits reports, pursuant to the conditions attached to the Authorization.

                Operational Requirements
                Operational requirements for a geophysical program include:
                    •   obtaining approval from the Board’s Chief Safety Officer before test-firing an air gun on a
                        vessel or platform (s. 12(4) Newfoundland Offshore Area Petroleum Geophysical Operations
                        Regulations);
                    •   ensuring that all new personnel complete a survival course that has been approved by the
                        Chief Safety Officer (s. 22(1)(d)(i), Newfoundland Offshore Area Petroleum Geophysical
                        Operations Regulations);
                    •   ensuring that all new personnel complete a helicopter underwater escape course that has been
                        approved by the Chief Safety Officer, where regular changes of geophysical crew by
                        helicopter are planned (s. 22(1)(d)(ii), Newfoundland Offshore Area Petroleum Geophysical
                        Operations Regulations); and
                    •   submitting materials or data as specified by the Board.

                Applicants are advised to consult the Newfoundland Offshore Area Petroleum Geophysical Operations
                Regulations and the Board’s “Geophysical, Geological, Environmental and Geotechnical Program
                Guidelines” for a complete list of operational requirements.


2-A to 2-H      Requirements of an Application for a Geophysical, Geological,
                Geotechnical or Environmental Program Authorization
                There are a number of additional requirements that are associated with the seeking of a Geophysical,
                Geological, Geotechnical, or Environmental Program Authorization. While not all of these
                requirements need to be satisfied when the application is first submitted to the Board, all must be in
                place before the Authorization will be issued.

                These requirements are described in sections 2-A through 2-H.

                For programs associated with development, production or decommissioning, some of these
                requirements will have already been submitted as part of the Applicant’s Development Application.
                In these cases, the Board does not require that they be resubmitted. However, additional information
                as per the guidelines is needed. Chart 2 makes a distinction between requirements that “precede” the
                approval of a Development Application and those that “follow” Development Application approvals.




 2-6                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                   2 – Geophysical, Geological, Geotechnical or
                                                                          Environmental Program Authorization

2-A            Operating Licence
               A Geophysical, Geological, Geotechnical or Environmental Program Authorization will only be
               issued to Applicants who have obtained an Operating Licence. If the Applicant already holds a valid
               Operating Licence, a new one will not have to be obtained. The procedure for obtaining an
               Operating Licence is described in section 1-A of this Guide.


2-B            Canada-Newfoundland Benefits Plan
               A Geophysical, Geological, Geotechnical or Environmental Program Authorization will not be
               issued until the Board has approved the Applicant’s Canada-Newfoundland Benefits Plan. For
               exploratory activities which occur prior to the approval of a Development Application, the Applicant
               will be expected to submit an Exploration Benefits Plan. For activities that occur after a Development
               Application has been approved, a new Benefits Plan does not have to be appended to the Work
               Authorization application. However, additional information as per the guidelines may need to be
               submitted. Benefits concerns associated with these activities will have been addressed in the Benefits
               Plan that was approved as part of the Development Application.

               The general requirements associated with the preparation of Benefits Plans associated with technical
               programs can be found in the Board’s “Exploration Benefits Plan Guidelines,” April 1987 and in
               section 3.13 of the Board’s “Geophysical, Geological, Environmental and Geotechnical Program
               Guidelines (Draft, January 2004).”


2-C            Safety Plan
               Prior to authorizing any Geophysical, Geological, Geotechnical or Environmental Program, the
               Board will require the Applicant to submit a Safety Plan. The Safety Plan is intended to outline the
               measures that will be put in place to enable the activity to be undertaken safely. All Safety Plans must
               comply with the Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft
               November 1989), with all applicable Newfoundland social legislation and, where applicable, with
               Transport Canada’s Marine Occupational Safety and Health Regulations. As part of the Safety
               Plan, the Applicant must submit an Emergency Response Plan (ERP) to the Board for approval.

               The specific requirements of a Safety Plan for a Geophysical, Geological, Geotechnical or
               Environmental Program are described in section 3.1.2 of the Board’s “Geophysical, Geological,
               Environmental and Geotechnical Program Guidelines.”

               For programs that occur after a Development Application has been approved, a new Safety Plan may
               not be required if the proposed activities have been sufficiently addressed in the comprehensive Safety
               Plan that the Applicant submitted as part of the Development Application. Additional information
               as per the guidelines may be needed.

               A general description of the Safety Plan requirements is set out in section 1-C of this Guide.




 Newfoundland and Labrador Offshore Guide – January 2004                                                           2-7
 2 – Geophysical, Geological, Geotechnical or
 Environmental Program Authorization

2-D             Environmental Assessment
                As part of its environmental protection responsibilities, the Board must ensure that an environmental
                assessment is conducted of proposed technical programs in the Newfoundland and Labrador
                Offshore Area. In addition, the Board is required by the Canadian Environmental Assessment Act
                (CEAA) to ensure the assessment is conducted in accordance with the CEAA.

                At least four months prior to scheduled program activities, the Operator should submit a basic
                program description, including a schedule and the proposed location. Programs that are proposed for
                areas where similar programs have not recently been assessed may require one to two additional
                months of lead time, and Operators are advised to consult the Board as early as possible concerning
                their plans.

                Based on the information provided in the project description, the Board will determine the
                environmental assessment requirements (e.g., CEAA screening or internal EA process). The scope of
                the project and scope of the factors to be assessed also will be determined by the Board in consultation
                with other federal and provincial agencies.

                Following receipt of a scoping document from the Board, the Operator must submit, consistent with
                the requirements of the CEAA, in accordance with the approved scope of project and in a format
                suitable for public release, an assessment of the potential environmental effects associated with the
                proposed program. This assessment should include effects associated with reasonably foreseeable
                accidental events and any cumulative environmental effects that are likely to result from the program in
                combination with other projects or activities that have been or will be carried out. Any feasible
                measures that may serve to mitigate adverse effects, and the likelihood of significant adverse effects
                following application of these measures, should be described.

                The Operator also should report on any relevant consultations with interested parties who may be
                affected by program activities. Such parties include, but are not limited to, the following: the
                Department of Fisheries and Oceans (DFO), the Fish, Food and Allied Workers Union
                (FFAWU), and relevant harvesting companies. The report should identify specific areas of concern
                that were raised in these consultations and the proposed means by which valid concerns will be
                addressed.

                The environmental assessment must be submitted to the Board at least 90 days prior to the planned
                commencement of activities.

                A description of general requirements of environmental assessment is provided in section1-D of this
                Guide.


2-E             Proof of Financial Responsibility
                The Applicant must provide Proof of Financial Responsibility for any Geophysical, Geological,
                Geotechnical or Environmental Program. The financial responsibility requirements specifically
                associated with these programs are described in section 5.7 of the “Guidelines Respecting Financial
                Responsibility Requirements For Work or Activity in the Newfoundland and Nova Scotia Offshore
                Areas” and section 3.1.5 of the “Geophysical, Geological, Environmental and Geotechnical
                Program Guidelines.”



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                                                                  2 – Geophysical, Geological, Geotechnical or
                                                                         Environmental Program Authorization


               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization. Usually, Geophysical Programs require authorization-specific fees,
               while Geotechnical, Geological and/or Environmental Programs may be covered by a general
               program fee.

               A general description of the general Proof of Financial Responsibility requirements for a Work
               Authorization is provided in section 1-F of this Guide.


2-F            Program Description
               As described in section 1-G, the Applicant is required to provide a detailed description of the aims
               and objectives of the proposed program and any relevant supporting documentation.


2-G            Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a Geophysical, Geological,
               Geotechnical or Environmental Program will be authorized. In practice, the Declaration of Fitness is
               only submitted to the Board when all other requirements, as described in sections 2-A to 2-H, have
               been fulfilled. The general requirements of a Declaration of Fitness are outlined in section 1-H.


2-H            Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




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2 – Geophysical, Geological, Geotechnical or
Environmental Program Authorization


Notes




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              3.0 DRILLING PROGRAM AUTHORIZATION

              Chapter 3 describes the steps followed in the issuance of a Drilling Program Authorization, for the
              Newfoundland and Labrador Offshore Area. Chart 3 illustrates these procedures.

              A Drilling Program Authorization (DPA) is needed to undertake exploration, reservoir delineation,
              or development/production drilling operations for petroleum resources in the offshore area. It
              authorizes an Operator to conduct a “drilling program” and includes all operations and activities
              ancillary to the program. After a DPA is issued, each well within the drilling program must be
              approved by the CNOPB through an Approval to Drill a Well (ADW). The process for obtaining
              an ADW is set out in Chapter 4.

              Programs associated with development or production will only be authorized if they have been
              contemplated in an approved Development Plan. For programs associated with exploration, a
              Development Plan does not need to be in place before the program will be authorized. Although
              DPAs authorize their holders to drill into any stratigraphic layer in a particular field, such activities
              will not be permitted unless they have also been discussed in the Development Plan.

              The conditions under which DPAs are issued differ slightly between the CNOPB and the
              CNSOPB. In Newfoundland and Labrador, the Board may allow several drilling rigs to be covered
              under one DPA, provided that the rigs are relatively simple and have a similar management system.7
              In Nova Scotia, a separate DPA is typically issued for each rig.

              The processes relating to the issuance of a Drilling Program Authorization are set out in the
              C-NAAIA and in various CNOPB regulations, requirements and guidelines. These include:
                     •   the Newfoundland Offshore Petroleum Drilling Regulations;
                     •   the Newfoundland Offshore Petroleum Installations Regulations;
                     •   the Newfoundland Offshore Certificate of Fitness Regulations;
                     •   the Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft
                         November 1989);
                     •   the “Guidelines Respecting Drilling Programs in the Newfoundland Offshore Area;”
                     •   the “Guidelines for Drilling Equipment: Newfoundland Offshore Area;”
                     •   the “Safety Plan Guidelines;”
                     •   the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                         the Newfoundland and Nova Scotia Offshore Areas;”
                     •   “Offshore Waste Treatment Guidelines;”
                     •   “Guidelines Respecting Physical Environmental Programs During Petroleum Drilling and
                         Production Activities on Frontier Lands;”
                     •   “Offshore Chemical Selection Guidelines;”
                     •   the “Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field
                         Evaluations in the Newfoundland and Nova Scotia Offshore Areas;” and
                     •   the “Exploration Benefits Guidelines: Newfoundland Offshore Area.”




              7
                  For example, Husky Oil has had as many as three rigs covered under the same DPA.


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               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               aforementioned documents to ensure they have satisfied all of the requirements set out by the
               CNOPB.


3-1            Application for a Drilling Program Authorization is Submitted to the
               Board
               The Applicant initiates the process by forwarding three duly executed copies of the “Drilling
               Program Authorization Application” form to the Board (s. 5, Newfoundland Offshore Petroleum
               Drilling Regulations). These forms are available from the CNOPB office in St. John’s. Each form
               must be signed by the senior Operator’s representative responsible for the program.

               The lead time for submission of DPA applications is not specified by regulations. Operators are,
               however, encouraged to apply for a DPA three to four months prior to the anticipated spud date of
               the first well in the drilling program. The DPA will be issued for a specified period of time,
               depending on the proposed drilling schedule.

               In addition to the submission of application forms, there are a number of other requirements that must
               be satisfied before an Authorization will be issued. These include the obtaining and/or submitting of:
                   •   an Operating Licence (3-A);
                   •   a Canada-Newfoundland Benefits Plan (3-B);
                   •   a Safety Plan (3-C);
                   •   an Environmental Protection Plan (3-D);
                   •   an Approved Development Plan (3-E);
                   •   an Exploration Licence, Significant Discovery Licence, or Production Licence (3-F);
                   •   Certificate(s) of Fitness (3-G);
                   •   Proof of Financial Responsibility (3-H);
                   •   a Program Description (3-I);
                   •   an Operations Manual (3-J);
                   •   an Approved Data Acquisition Program (3-K);
                   •   Pool, Field (Well) Location Survey (3-L);
                   •   Approval of a Means for Disposing of Waste Materials (3-M);
                   •   a Declaration of Fitness (3-N); and
                   •   additional requirements as specified by the Board (3-O).

               These requirements are described in sections 3-A through 3-O at the end of this chapter.


3-2            Application is Reviewed by the Board (Consultation with Other
               Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. The agencies that are typically
               consulted by the Board in reviewing an application for a Work Authorization are listed in section 1-2.




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3-3 to 3-4      Board Decision Regarding the Acceptability of the Canada-
                Newfoundland Benefits Plan
                Prior to making a decision regarding the issuance of a Work Authorization in support of an
                exploratory drilling program, the Board must first approve the Applicant’s Canada-Newfoundland
                Benefits Plan. If the Benefits Plan is considered to be unsatisfactory, the process stops and the plan
                may be revised and resubmitted for another review. If the Benefits Plan is considered to be
                acceptable, the Board will consider approving the Work Authorization request.

                The federal Minister of Natural Resources and the provincial Minister of Mines and Energy may
                jointly issue written directives to the Board in relation to the Canada-Newfoundland Benefits Plan,
                and any provisions thereof (s. 42(1)(d), C-NAAIA).

                For drilling programs conducted after a Development Application has been approved by the Board, such
                as those associated with development and production, an approved Benefits Plan will already be in place.
                In these situations, the Applicant is not required to submit another Benefits Plan. Rather, it is expected
                that the existing Benefits Plan will have addressed all benefits matters relating to the program.


3-5             Comprehensive Study Under CEAA May Be Required
                The CNOPB is a federal authority pursuant to the Canadian Environmental Assessment Act
                (CEAA) and must ensure that an environmental assessment is conducted of proposed exploration
                drilling programs in the offshore area, in accordance with the CEAA.

                Because offshore exploration drilling is named within the Comprehensive Study List Regulations
                under the CEAA, a Comprehensive Study is required as a component of the approval process for
                drilling exploratory wells in the offshore area, outside of designated study areas. Refer to section 3-D
                for a further explanation and to Chapter 15 for an explanation of the CEAA process.


3-6 to 3-8      Board Decision Regarding the Issuance of a Drilling Program
                Authorization
                Once the Board has reviewed the Work Authorization application and consulted with other agencies,
                as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
                rejects the application, the Applicant may revise the application and reapply. If the Board approves
                the application, and any additional requirements have been satisfied, the Work Authorization will be
                issued and the program may proceed.


3-9             Possible Licences, Permits and Authorizations From Other
                Regulatory Agencies
                In addition to the requirements of the Board, and depending on the nature of the project, Applicants
                may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
                may include:
                    •    a CEAA Determination (Chapter 15);




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                                                                                   3 – Drilling Program Authorization


                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a Transport Canada Vessel Certification (Chapter 19);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);
                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               Pursuant to sections 4.5 and 4.6 of the “Guidelines Respecting Drilling Programs in the
               Newfoundland Offshore Area,” Canadian flagged drilling vessels must meet the requirements of the
               Canada Shipping Act and must undergo inspection and certification by Transport Canada. In
               addition, all standby vessels to be used in the drilling operation must conform to Transport Canada’s
               “Standards Respecting Standby Vessels (TP7920)” (ss. 11-12 Newfoundland Offshore Petroleum
               Drilling Regulations). In Newfoundland and Labrador, a Letter of Compliance from Transport
               Canada must be obtained for both standby vessels and MODUs. These Transport Canada
               requirements are discussed in detail in Chapter 19 of this Guide.

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. For the DPA Authorization, the Board
               has, in practice, required the submission of the Letter(s) of Compliance from Transport Canada.
               Even if a Board Authorization is issued in advance of one or more required federal approvals, the
               work itself may not begin until all of these approvals have been obtained.


3-10           Continuing Obligations
               After the Authorization is issued, the Operator will be subject to continuing obligations. In addition
               to complying with all procedural requirements, Operators are expected to satisfy a variety of approval,
               reporting and submission requirements. These consist of a) ongoing requirements, which must be
               satisfied at regular intervals throughout the program, and b) operational requirements, which must only
               be satisfied under specific circumstances.
               Those ongoing and operational requirements that are tied to the drilling of a specific well are dealt
               with in the next chapter. These lists consist solely of requirements that are tied to the drilling program
               as a whole.

               Ongoing Approval, Reporting and Submission Requirements
               Ongoing reporting requirements for both Exploratory and Development Drilling Programs may
               include:
               Newfoundland Offshore Petroleum Drilling Regulations
                   •    submitting a drilling installation inspection report at least once per year (s. 106(1)(b));
                   •    reporting the results of an inspection of all drilling rigs and critical joints at least once every
                        four years (s. 106(2)); and
                   •    submitting monthly summaries of accident statistics to the CSO (s. 145(1)).




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3 – Drilling Program Authorization


               Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November1989)
                   •   submitting an annual report setting out the number of accidents, disabling injuries, minor
                       injuries and other occurrences that affected the Operator’s employees over the course of the
                       12 month period ending December 31st of the preceding year (s. 15).

               Ongoing requirements exclusive to Development Drilling Programs may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •   submitting a daily operating record to the CCO and the CSO (if requested) (s. 72(1).

               Operational Approval, Reporting and Submission Requirements
               Operational requirements for both Exploratory and Development Drilling Programs may include:
               Newfoundland Offshore Petroleum Drilling Regulations
                   •   submitting contingency plans to the Board, on request (s. 64(3));
                   •   obtaining an Approval to Drill a Well (s. 67(1)(a));
                   •   obtaining an Approval to Re-enter a Well (s. 67(1)(b));
                   •   obtaining an Approval to Drill a Test Hole (s. 67(2));
                   •   obtaining an approval of the manner used to dispose of all sewage, galley, and other domestic
                       waste material that might contribute to pollution (s. 114(a)); and
                   •   obtaining an approval of the manner used to dispose of any spent or excess acid (s. 114(c)).

               Newfoundland Offshore Petroleum Installations Regulations
                   •   notifying the Board if the Certifying Authority for the installation is changed (s. 10);
                   •   reporting any repair, replacement or modification to the installation (s. 67(1));
                   •   obtaining an approval by both the CSO and the Certifying Authority when any equipment
                       that could affect the strength, stability, integrity, operability or safety of the installation is
                       brought aboard the installation (s. 67(2));
                   •   notifying the CSO and the Certifying Authority if any deterioration of the installation that
                       could impair the safety of the installation or damage the environment is noticed (s. 67(4));
                   •   reporting any situation or event involving any danger or accident to a person or property
                       (ss. 70(1) and 70(2)); and
                   •   informing the Chief at least 24 hours before the up-ending or setting on bottom of an
                       installation (s. 70(3)(c)).

               Operational requirements exclusive to Development Drilling Programs may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •   obtaining an approval for an amendment to an approved development plan (s. 6).

               Newfoundland Offshore Petroleum Drilling Regulations
                   •   obtaining an approval for the replacement of equipment or alteration of a procedure
                       described in the Development Program Authorization prior to undertaking the replacement
                       or alteration (s. 7(2)).




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                                                                               3 – Drilling Program Authorization


3-A to 3-O     Requirements of an Application for a Drilling Program Authorization
               and/or an Application
               There are a number of additional requirements that are likely to be associated with the seeking of a
               Drilling Program Authorization. While not all of these requirements need to be satisfied when the
               application is first submitted to the Board, all must be in place before the Authorization will be
               issued. They are described in sections 3-A through 3-O.


3-A            Operating Licence
               A Drilling Program Authorization will only be issued to Applicants who have obtained an Operating
               Licence. If the Applicant already holds a valid Operating Licence, a new one will not have to be
               obtained. The procedure for obtaining an Operating Licence is described in section 1-A of this
               Guide.


3-B            Canada-Newfoundland Benefits Plan
               A Drilling Program Authorization will not be issued until the Board has approved the Applicant’s
               Canada-Newfoundland Benefits Plan. For exploratory drilling programs, which occur prior to the
               approval of a Development Application, the Applicant will be expected to submit an Exploration
               Benefits Plan. For drilling programs that occur after a Development Application has been approved,
               a new Benefits Plan does not have to be appended to the Work Authorization application, although
               additional information may be required, as per the guidelines. This is because benefits concerns
               associated with these operations will have been addressed in the Benefits Plan that was approved as
               part of the Development Application.

               The general requirements associated with the preparation of both Exploration and Development
               Benefits Plans are outlined in section 1-B of this Guide.


3-C            Safety Plan
               Prior to authorizing any drilling program, the Board will require the applicant to submit a Safety
               Plan. The Safety Plan is intended to outline the measures that will be put in place to enable the
               activity to be undertaken safely. All Safety Plans must comply with the Petroleum Occupational
               Safety and Health Regulations, Newfoundland (Draft November 1989), with all applicable
               Newfoundland and Labrador social legislation and, where applicable, with Transport Canada’s
               Marine Occupational Safety and Health Regulations. As part of the Safety Plan, the applicant must
               submit an Emergency Response Plan (ERP) and an Oil Spill Response Plan (OSRP) to the
               Board for approval.

               The safety of the proposed program is assessed by the Board’s staff prior to the Authorization of any
               drilling program. This assessment is made pursuant to section 138.2 of the C-NAAIA which requires
               that the Board, prior to issuing a DPA, consider the safety of the program by reviewing the system as
               a whole, as well as its components, including structures, facilities, equipment, operating procedures
               and personnel.




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 3 – Drilling Program Authorization


                During the Board’s safety assessment, staff will pay particular attention to the various safety issues
                identified in Appendix E of the “Guidelines Respecting Drilling Programs in the Newfoundland
                Offshore Area,” January 2000. In particular, the Board expects Operators to demonstrate that the
                best practicable evacuation technology available is used on drilling installations. The information
                which is typically requested to be submitted, or made available to the Board’s staff, in connection with
                this review is listed in Appendix B of these Guidelines. The specific requirements of a Safety Plan for
                a drilling program are described in sections 4.7 and 4.8 of the “Guidelines Respecting Drilling
                Programs in the Newfoundland Offshore Area.”

                For programs that occur after a Development Application has been submitted, a new Safety Plan
                may not be required if these activities have been sufficiently addressed in the comprehensive Safety
                Plan that the Applicant submitted as part of the Development Application. The general requirements
                of a Safety Plan that is associated with a Development Application are described in the Board’s
                “Safety Plan Guidelines,” and in Chapter 8 of the Board’s “Development Application Guidelines.”

                Operators are also advised that an audit meeting is normally held with the Operator and its major
                contractors following the CNOPB’s review of the documentation supplied for the safety assessment.
                This meeting is normally timed to occur approximately one month prior to spud. A field verification
                audit is normally performed onboard the drilling installation and at least one standby vessel
                immediately prior to spud.

                All drilling programs must conform to the requirements of “Part IV: Safety and Training of
                Personnel” in the Newfoundland Offshore Petroleum Drilling Regulations. Furthermore, all
                production drilling operation requiring personnel with special skills will not be permitted until:
                    •    the Operator has submitted to the Chief Safety Officer a description of the training that the
                         operator proposes to require of the persons employed for that operation;
                    •    this training has been approved by the Chief Safety Officer under subsection 62(2) of the
                         Newfoundland Offshore Area Petroleum Production and Conservation Regulations; and
                    •    the Operator has ensured that the employees have successfully completed approved training.

                The Chief Safety Officer shall approve the training program as part of the Safety Plan if the training
                is sufficient to enable the operation to be conducted in a safe manner. Although a Personnel Training
                Program is a condition precedent to the issuing of a DPA, it is also an ongoing requirement. It is
                expected that further training programs will be employed as needed.

                A general description of the Safety Plan requirements is set out in section 1-C of this Guide.


3-D             Environmental Assessment
                As part of its environmental protection responsibilities, the CNOPB must ensure that an
                environmental assessment is conducted of proposed drilling programs in the offshore area. In addition,
                the Board is required by the Canadian Environmental Assessment Act to ensure the assessment is
                conducted in accordance with the CEAA.

                Because offshore exploration drilling is named within the Comprehensive Study List Regulations
                under the CEAA, a Comprehensive Study is required as a component of the approval process for
                drilling exploration wells. The CNOPB is a federal authority under the CEAA and becomes the lead



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                                                                               3 – Drilling Program Authorization


              Responsible Authority in the case of a CEAA review of an exploration drilling application (see
              Chapter 15).

              The CEAA also provides for the fact that previous environmental assessments may have been
              adequately prepared for previous drilling activities. A Comprehensive Study under CEAA is required
              for a proposed offshore exploratory drilling project that is located outside the limits of a study area
              delineated in:
              (a) an environmental assessment of a project for the exploratory drilling for, or production of, oil or
                  gas in an offshore location that was conducted by a Review Panel or as a Comprehensive Study
                  under the CEAA; or
              (b) an environmental assessment of a proposal for the exploratory drilling for, or production of, oil or
                  gas in an offshore location that was conducted by a Panel under the Environmental Assessment
                  Review Process Guidelines Order.

              Such designated study areas have been identified for portions of Grand Banks and the Scotian Shelf
              — Applicants for drilling programs should contact the Board for specific study area locations.

              The CNOPB will typically require the Applicant, consistent with requirements under CEAA, to
              prepare and submit an Environmental Impact Statement (EIS) and an Environmental Protection
              Plan (EPP) to examine the likely environmental effects of the proposed drilling program.

              In an EIS/EPP, the Applicant should provide sufficient information to permit an assessment of the
              potential environmental effects of its proposed activities, and should identify any measures which it
              proposes to mitigate these effects. Operators are advised to consult the CNOPB’s “Guidelines
              Respecting Drilling Programs in the Newfoundland Offshore Area, January 2000.” Also, the
              EIS/EPP should include:
                  •    a comprehensive examination of the ecological/biological effects of drilling on wildlife and the
                       environment in the proposed area;
                  •    estimates of the types and quantities of substances to be discharged from the drilling
                       installation and descriptions of the equipment and procedures planned to treat these
                       discharges, see: “Offshore Waste Treatment Guidelines;”
                  •    proposals for measuring, observing and forecasting environmental conditions, see:
                       “Guidelines Respecting Physical Environmental Programs During Petroleum Drilling and
                       Production Activities on Frontier Lands: Meteorology and Ice Tape Formats and Forecast
                       Verification;”
                  •    the qualifications and experience of weather forecast personnel; and
                  •    the oil based mud procedures in place, if oil based drilling muds are to be used, see
                       “Offshore Waste Treatment Guidelines.”

              In general terms, following direction from the Board, the Applicant must submit, consistent with the
              requirements of CEAA, in accordance with the approved scope of the project and in a format suitable
              for public release, an assessment of the potential affects associated with the proposed program. The
              Applicant should also report on any relevant consultations with other affected parties, identifying
              specific areas of concern and the proposed means by which valid concerns will be addressed.

              Drilling programs that are proposed for locations outside of CEAA designated study areas will be
              subject to the Comprehensive Study requirement of CEAA. New Comprehensive Studies will not



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 3 – Drilling Program Authorization


                typically be required, however, for drilling programs that occur during the development or production
                phases of a project. This is because provisions to protect the environment during the program should
                have already been addressed in the environmental assessment at the Development Application and
                approval stage. New exploration well proposals may, however, be subject to a Screening pursuant to
                CEAA and additional environmental protection measures may be required beyond the existing
                EIS/EPP as a result.

                Each subsequent Screening of individual exploratory wells must include a completed Screening Report
                which takes into account site specific circumstances, and a brief overview of how the project could
                contribute to cumulative environmental effects. A typical subsequent Screening Report would include:
                    •    the timing, location and description of the project including the movement of drill wastes (if
                         discharged) in the marine environment;
                    •    local and seasonal ecological constraints;
                    •    an evaluation of potential site-specific effects, including cumulative effects;
                    •    potential conflicts with fisheries operations;
                    •    appropriate mitigation measures; and
                    •    reference to the project’s spill contingency plans.

                The CNOPB may also require the Operator to submit an Environmental Effects Monitoring
                Program for each new exploratory well.

                Once a drilling program has been approved, the Applicant should arrange for the Port
                Meteorological Officer of the Atmospheric Environment Branch of Environment Canada to inspect
                the meteorological instrumentation for the project.


3-E             Approved Development Plan
                An approved Development Plan should be in place before a Drilling Program Authorization
                application is made. It is expected that all development activities will have been contemplated ahead
                of time in the Development Plan. The requirements associated with obtaining a Development Plan
                Approval are discussed in Chapter 4 of the Board’s “Development Application Guidelines” and
                described in Chapter 10 of this Guide.

                Exploration drilling activities occur before a Development Application is submitted and, therefore, do
                not require that an approved Development Plan be in place.


3-F             Exploration Licence, Significant Discovery Licence or Production
                Licence
                The exclusive right to drill for petroleum is conferred to interest holders by an Exploration Licence
                (see Chapter 6), a Significant Discovery Licence (see Chapter 7) or a Production Licence (see
                Chapter 9).

                Although an Applicant may obtain a Drilling Program Authorization for exploration drilling without
                an Exploration Licence or a Significant Discovery Licence, doing so would not entitle the Applicant
                to the rights to any petroleum discovered.



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3-G            Certificate(s) of Fitness
               The Applicant must hold a Certificate of Fitness for any drilling rig or other installation that is used
               as part of a DPA. If Certificates of Fitness are already in place for all installations that are employed
               in the program, new ones are not required.

               In addition, every holder of a Work Authorization for which a prescribed installation is used must
               appoint an Installation Manager to be in command of the installation. New managers need not be
               appointed if managers are already in place for all installations used in the program.

               The requirements associated with obtaining a Certificate of Fitness and appointing an Installations
               Manager are summarized in section 1-E of this Guide.


3-H            Proof of Financial Responsibility
               Pursuant to the C-NAAIA and section 72 of the Newfoundland Offshore Petroleum Drilling
               Regulations, the Applicant must provide Proof of Financial Responsibility for any drilling program.
               This is to serve as a contingency against potential petroleum spill or debris related claims, to ensure
               that the Operator completes the drilling program and terminates the well, leaving the drill site in a
               satisfactory condition, and to satisfy the Board that it is able to meet other financial liabilities.

               Information about the Financial Responsibility requirements for drilling programs is provided in
               section 5.4 of the “Guidelines Respecting Financial Responsibility Requirements For Work or
               Activity in the Newfoundland and Nova Scotia Offshore Areas.” Additional information is available
               in the “Guidelines Concerning Financial Responsibility for Drilling in the Newfoundland and Nova
               Scotia Offshore Areas.”

               The limits of absolute liability for spill and debris related claims resulting from drilling activities are
               prescribed by the Canada-Newfoundland Offshore Oil and Gas Spills and Debris Liability
               Regulations.

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific work authorization.

               The general procedures associated with submitting Proof of Financial Responsibility for any Work
               Authorization are outlined in section 1-F of this Guide.


3-I            Program Description
               As described in section 1-G, the Applicant is generally required to provide a detailed description of
               the aims and objectives of the proposed program and any relevant supporting documentation.




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3-J             Operations Manuals
                Pursuant to subsection 63(1) of the Newfoundland Offshore Petroleum Installations Regulations and
                subsection 63(2)(b) of the Newfoundland Offshore Petroleum Drilling Regulations, for each
                installation used in a drilling operation, Operators are required to submit an Operations Manual to
                the Board for approval. Operators are advised to consult the regulations for a complete list of the
                requirements that are to be satisfied by this manual.

                In addition, Operators are required to maintain and, when requested, submit an operating manual for
                all normal drilling and related operations carried out by that Operator and for abnormal conditions in
                situations that can be reasonably anticipated during drilling operations. (s. 63(1), Newfoundland
                Offshore Petroleum Drilling Regulations).


3-K             Data Acquisition Program
                The Newfoundland Offshore Area Petroleum Production and Conservation Regulations provide the
                framework for evaluation programs pertaining to reservoir characterization and effective depletion
                monitoring. In accordance with these regulations, Applicants must submit a Data Acquisition
                Program to the Board before a DPA associated with development and production will be issued.
                When an Applicant’s Data Acquisition Program receives Board approval, the applicant tacitly
                satisfies a number of other regulatory approval and submission requirements, including the need for:
                    •    a Development Well Coring Program Approval (s. 11); and
                    •    a Testing Program Approval (s. 12(2)).

                In contrast to the procedure for development wells, data acquisition for exploration wells is typically
                handled on a well-by-well basis through a Well Evaluation Program. The required components of a
                Well Evaluation Program are discussed in section 4-F of this guide.

                The applicant must also complete a petroleum resource evaluation, setting out the estimates of
                petroleum resources believed to be in the area under exploration. The requirements for the petroleum
                resource evaluation are set out in the “Guidelines Respecting Drilling Programs in the Nova Scotia
                Offshore Area and the Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool
                and Field Evaluations in the Newfoundland and Nova Scotia Offshore Area.”


3-L             A Pool, Field (Well) Location Survey
                Pursuant to paragraph 74(1)(a) of the Newfoundland Offshore Petroleum Drilling Regulations, every
                Operator shall ensure that a legal survey is used to confirm the location of any development well.
                Applicants are also required to submit a location survey to confirm the location of any discovery well
                or any other well, on the request of the Chief (ss. 74(1)(b) and (c), Newfoundland Offshore
                Petroleum Drilling Regulations).




 3-12                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                               3 – Drilling Program Authorization


3-M            Approval of a Means for Disposing of Waste Materials
               Before a DPA will be issued, the Applicant must provide a means, approved by the Board or any
               person designated by the Board, of disposing of drilling fluid, drill cuttings and gas separated from
               the drilling fluid (s. 112, Newfoundland Offshore Petroleum Drilling Regulations). In practice,
               following a Development Application, these matters would be addressed as part of the Environment
               Protection Plan (3-D above).


3-N            Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a drilling program will be
               authorized. In practice, the Declaration of Fitness is only submitted to the Board when all other
               requirements, as described in sections 3-A through 3-O, have been fulfilled. The general
               requirements of a Declaration of Fitness are outlined in section 1-H.


3-O            Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




 Newfoundland and Labrador Offshore Guide – January 2004                                                        3-13
3 – Drilling Program Authorization



Notes




3-14                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                                                     4 – Approval to Drill a Well



              4.0 APPROVAL TO DRILL A WELL

              Chapter 4 describes the steps followed in the issuance of an Approval to Drill a Well, for the
              Newfoundland and Labrador Offshore Area. Chart 4 illustrates these procedures.

              An Approval to Drill a Well (ADW) permits the Operator to drill a particular well using the drilling
              evaluation procedures described in the application and the accompanying well prognosis. Once a
              Drilling Program Authorization has been obtained (see Chapter 3 of this Guide for further details), a
              separate ADW must be obtained for each well within the drilling program.

              The ADW covers all activities up to, and including, the initial completion or abandonment of the
              well. Any subsequent operations on development wells will be authorized under a Well Operations
              Program Authorization (WOPA) and an Approval for a Well Operation (AWO), which are
              discussed in Chapter 13.

              Like Drilling Program Authorizations, ADWs may be sought in association with the exploration,
              delineation, development, and/or production stages of a project. For wells associated with
              development or production, it is expected that all activities in support of the well will have been
              contemplated in an approved Development Plan. Exploration and delineation wells do not require a
              Development Plan to be in place.

              The processes relating to the issuance of an ADW are set out in the C-NAAIA and in various
              CNOPB regulations, requirements and guidelines. These include:
                  •   the Newfoundland Offshore Petroleum Drilling Regulations;
                  •   the Newfoundland Offshore Petroleum Installations Regulations;
                  •   the Newfoundland Offshore Certificate of Fitness Regulations;
                  •   the Petroleum Occupations Safety and Health Regulations, Newfoundland (Draft November
                      1989);
                  •   the “Guidelines Respecting Drilling Programs in the Newfoundland Offshore Area;”
                  •   the “Guidelines for Drilling Equipment: Newfoundland Offshore Area;”
                  •   the “Chemical Selection Guidelines;”
                  •   the “Safety Plan Guidelines;”
                  •   the “Offshore Waste Treatment Guidelines;”
                  •   the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                      the Newfoundland and Nova Scotia Offshore Areas;”
                  •   the Canada-Newfoundland Offshore Oil and Gas Spills and Debris Liability Regulations;
                  •   the “Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field
                      Evaluations in the Newfoundland and Nova Scotia Offshore Areas;” and
                  •   the “Exploration Benefits Guidelines: Newfoundland Offshore Area.”

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              aforementioned documents to ensure they have satisfied all of the requirements set out by the
              CNOPB.




Newfoundland and Labrador Offshore Guide – January 2004                                                           4-1
4 – Approval to Drill a Well




4-2                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                                          4 – Approval to Drill a Well


4-1            Operator Provides Notification of Intention to Drill or Re-Enter a
               Well
               Pursuant to section 66 of the Newfoundland Offshore Petroleum Drilling Regulations, every Operator
               shall notify the Chief in writing of the day spud-in8 or re-entry, as the case may be, is to commence.
               This notification should be given at least 45 days prior to the commencement of the spud-in of any
               proposed well or the re-entry of a well that has been suspended.


4-2            Application for Approval to Drill a Well is Submitted to the Board
               Pursuant to section 68 of the Newfoundland Offshore Petroleum Drilling Regulations, an application
               for Approval to Drill a Well may be made by completing and forwarding three duly executed copies
               of the application form approximately 21 days prior to spud (six weeks is preferred). The application
               must be signed by the Operator’s senior representative responsible for the program. Additional
               information that is to be submitted along with an application for an ADW is listed in subsection
               68(2) of the Newfoundland Offshore Petroleum Drilling Regulations.

               In addition to the submission of the application, there are a number of other requirements that must
               be satisfied before an Authorization will be issued. These include the obtaining and/or submitting of:
                   •    a Drilling Program Authorization and all associated requirements (4-A);
                   •    a Seabed Survey (4-B);
                   •    a Well Prognosis (4-C);
                   •    an Approval of the Location of a Well (4-D);
                   •    Evidence of Financial Responsibility (4-E);
                   •    a Well Evaluation Program (4-F); and
                   •    additional requirements as specified by the Board (4-G).

               These requirements are described in sections 4-A through 4-G at the end of this chapter.


4-3            Operator Makes an Oral Presentation to the Board
               The Operator is usually required to make an oral presentation to the Board summarizing the
               geological prognosis, the drilling, environmental and operational considerations and Canada-
               Newfoundland benefits matters in respect of the well. This presentation is normally timed to occur
               around the time of the ADW submission.


4-4            Application is Reviewed by the Board (Consultation with Other
               Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. The agencies that are typically
               consulted by the Board in reviewing an application for a Work Authorization are listed in section 1-2.


               8
                means, in respect of the drilling of a well, the initial penetration of the seafloor (s. 2(mm),
               Newfoundland Offshore Petroleum Drilling Regulations.


 Newfoundland and Labrador Offshore Guide – January 2004                                                            4-3
  4 – Approval to Drill a Well


                  In addition, the Board will typically provide detailed information to the Department of National
                  Defence and the Canadian Coast Guard before issuing Approval to Drill a Well to ensure that both
                  Canadian and foreign vessels are informed of the undertaking.

                  For ADW applications associated with development, the Board will determine whether or not the
                  proposed well represents a significant departure from the Applicant’s approved Development Plan. If
                  so, the Applicant may be required to submit a second Development Application for approval before
                  the well will be approved, including requirements for environmental assessment (see Chapter 10,
                  section 10-E).


4-5 to 4-7        Board Decision Regarding the Issuance of an Approval to Drill a Well
                  Once the Board has reviewed the application and consulted with other agencies, as appropriate, it
                  will make a decision to either issue or refuse to issue the approval. If the Board rejects the application,
                  the Applicant may revise the application and reapply. If the Board approves the application, and any
                  additional requirements have been satisfied, the approval will be issued and drilling may proceed.

                  When the Board issues an ADW, it will typically notify the Department of National Defence and the
                  Canadian Coast Guard, to ensure that any foreign or domestic boats or submarines that may be
                  passing through the area are informed that the well is being drilled.

                  Pursuant to section 69 of the Newfoundland Offshore Petroleum Drilling Regulations, the ADW is
                  subject to a number of conditions. These include:
                      •    the Operator commencing drilling within 120 days of the day the ADW was issued;
                      •    the well being drilled no deeper than the depth proposed in the application for the Approval;
                      •    the contractor and the drilling installation identified in the application for the Approval being
                           used in the drilling operation; and
                      •    the Operator following the drilling program proposed in the application for the Approval.

                  In addition, the Board or any person designated by the Board may suspend or revoke the ADW
                  where the safety of operations becomes uncertain, owing to any of the conditions listed in section 70 of
                  the Newfoundland Offshore Petroleum Drilling Regulations.


4-8               Possible Licences, Permits and Authorizations From Other
                  Regulatory Agencies
                  In addition to the requirements of the Board, and depending on the nature of the project, Applicants
                  may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
                  may include:
                      •    a CEAA Determination (Chapter 15);
                      •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                           Fisheries and Oceans (Chapter 16);
                      •    a CEPA, 1999 Disposal at Sea Permit (Chapter 17);
                      •    a Transport Canada Vessel Certification (Chapter 19);
                      •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                           Licence (Chapter 20);



  4-4                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                        4 – Approval to Drill a Well


                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all of these
               approvals have been obtained.


4-9            Continuing Obligations During the Drilling Operation
               After the Approval to Drill is issued, the Operator will be subject to continuing obligations. In
               addition to complying with all procedural requirements, Operators are expected to satisfy a variety of
               approval, reporting and submission requirements. These consist of a) ongoing requirements, which
               must be satisfied at regular intervals throughout the program, and b) operational requirements, which
               must only be satisfied under specific circumstances.

               Ongoing Approval, Reporting and Submission Requirements
               Ongoing reporting requirements for exploratory, delineation and development drilling may include:
               Newfoundland Offshore Petroleum Drilling Regulations
                   •    submitting monthly summaries of accident statistics to the CSO (s. 145(1));
                   •    submitting tour sheets at least once each week (s. 149(2));
                   •    keeping and, if requested, submitting a daily record of all persons employed at or visiting the
                        drill site (s. 152(a));
                   •    keeping and, if requested, submitting a barge log or ships log in respect of a drilling
                        installation (s. 152(b));
                   •    submitting weekly summaries of all significant situations and significant events to the CSO
                        (ss. 153(1)(a));
                   •    submitting a daily geological report describing the lithogy of any formation drilled and the
                        nature of any reservoir fluids encountered during the preceding week (s. 153(1)(b));
                   •    submitting a weekly a summary of the results of any deviation surveys and directional surveys
                        that were taken during the preceding week (s. 153(1)(c));
                   •    submitting a daily report setting out the depth of the well, the lithogy of the formations
                        encountered during the previous day, the properties of the drilling fluid, the results of each
                        formation leak-off test, the weather and, where applicable, sea conditions and the
                        performance of the drilling installation (s. 153(2)); and
                   •    maintaining and, if requested, submitting a record of the receipt and consumption of all
                        explosive material at the drill site (s. 153(3)).

               Ongoing requirements exclusive to development drilling may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •    submitting a daily operating record to the CCO and the CSO, if requested (s. 72(1)).




 Newfoundland and Labrador Offshore Guide – January 2004                                                           4-5
4 – Approval to Drill a Well


                Operational Approval, Reporting and Submission Requirements
                Operational requirements for exploratory, delineation and development drilling may include:
                Newfoundland Offshore Petroleum Drilling Regulations
                    •   obtaining an approval to install additional casing in a well (s. 55(2));
                    •   obtaining an approval to set casing in a well (s. 55(3));
                    •   obtaining an approval to drill using air, gas, foam or other fluid in the circulatory system
                        (s. 61(1));
                    •   obtaining an approval to re-enter a well (s. 67(1)(b));
                    •   notifying the Chief where coal or other mineral deposits are encountered while drilling
                        (s. 92);
                    •   approval for the resumption of drilling after circulation has been lost (s. 101);
                    •   approval to resume drilling after an over-pressured zone has been detected (s. 102(3));
                    •   approval to resume drilling after a fatal accident has occurred (s. 105(3));
                    •   obtaining an approval of the manner used to store and flare petroleum used during formation
                        flow tests (s. 113(a));
                    •   obtaining an approval to use chemical countermeasures in the event of an oil spill
                        (s. 113(b));
                    •   obtaining an approval for the commencement of a welding operation at a drill site
                        (s. 135(1));
                    •   obtaining a licence from that Atomic Energy Control Board for any person using radioactive
                        substances at a drill site (s. 141(a));
                    •   submitting a report to the Chief regarding applied work or studies obtained or compiled by
                        the Operator that contains information relevant to the safety of drilling operations in the area
                        set out in the application for a DPA as soon as the report is available (s. 143(2));
                    •   notifying the Chief immediately of any significant situation or significant event (s. 145(1));
                    •   submitting a full written report of the significant situation or event referred to in subsection
                        145(1) as soon as practicable (s. 145(2));
                    •   notifying a Board Conservation Engineer within 24 hours of the date that a drilling unit
                        arrives at a drill site (s. 146(a));
                    •   notifying a Board Conservation Engineer within 24 hours of the hour and date of a spud-in
                        or of the entry of any well for the purposes of further drilling (s. 146(b));
                    •   submitting a plan of any legal survey made pursuant to section 74 (s. 147);
                    •   submitting two field-print copies of all wireline logs run by an operator (s. 154(2)(a));
                    •   submitting to the Chief on request wireline logs in digit form if they have been prepared in
                        that form (s. 154(2)(b));
                    •   submitting to the Chief on request all wireline log data in respect of a well before the well is
                        terminated (s. 154(2)(c));
                    •   submitting a record of the rate of penetration made in accordance with subsection 99(1) and
                        the record referred to in subsection 164(2) to the Chief on request (s. 155);
                    •   submitting any records made pursuant to the conducting of a formation flow test (s. 156(1));
                    •   submitting pressure and flow charts along with records (s. 156(2));
                    •   submitting a written report on any inspection of the installation made in accordance with
                        section 106, within 15 days after the report is completed (s. 157(1));
                    •   submitting a copy of any press release concerning any discovery, blowout, or other significant
                        event that occurs at the well (s. 159);
                    •   submitting a record of the depth interval for which samples cannot be obtained and the
                        reason thereof (s. 161(2));



4-6                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                        4 – Approval to Drill a Well


                   •    submitting a detailed testing program prior to conducting a formation flow test (s. 171(1);
                        and
                   •    obtaining an approval before a formation flow test is conducted (s. 171(2)).

               Operational requirements exclusive to development drilling may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •    obtaining an approval of an amendment to an approved Development Plan (s. 6);
                   •    submitting a survey to the CCO showing the location of the production installation for that
                        pool or field and the location of all wells (s.7(3));
                   •    informing the CCO at least 48 hours before carrying out a production test on a development
                        well, if requested (s. 12(5));
                   •    submitting the results of all production tests to the CCO (s. 12(6));
                   •    submitting a pool pressure survey program for approval (ss. 13(3) and 13(4));
                   •    providing the CCO with a compositional analysis of representative fluid from the pool and a
                        description of the general physical properties of the gas and liquid components of the fluid
                        (s. 15(6));
                   •    obtaining a flaring or venting of gas approval (s. 32(4));
                   •    obtaining approval from the CCO for the underground injection of water produced from a
                        well (s. 49(3));
                   •    submitting three copies of the results, data, analyses and schematics obtained from any
                        measurement, core , fluid sample, segregation test or well operation to the CCO within 60
                        days of the date that the activity is carried out (ss. 75(1) and 75(2));
                   •    submitting interim evaluations of any pilot scheme that the Operator has conducted at a pool
                        or field to the CCO and a report after the completion of the pilot scheme (ss. 76(1) and
                        76(2)); and
                   •    informing the Chief at least 24 hours before any lift at a production site in excess of 500
                        tonnes (s. 70(3)(b)).

               Newfoundland Offshore Petroleum Drilling Regulations
                   •    obtaining an approval for the replacement of equipment or alteration of a procedure
                        described in the Development Program Authorization prior to undertaking the replacement
                        or alteration (s. 7(2)).

               Requirements that cover the drilling program as a whole are discussed in section 3-9 of this Guide.


4-10           Operator Submits Well Logs to the Board in Anticipation of Well
               Termination Program
               As the well nears its expected termination date, the Operator must submit two field-print copies of all
               wireline log data in respect of the well to the Board for examination (ss. 154(2)(a) and(c),
               Newfoundland Offshore Petroleum Drilling Regulations). If digital forms have been prepared as well,
               they must also be submitted.




 Newfoundland and Labrador Offshore Guide – January 2004                                                          4-7
 4 – Approval to Drill a Well


4-11             Board Examines Well Logs and Determines Whether Further Testing
                 is Required
                 Upon receipt of the well logs, the Board will seek to determine whether further testing is required.
                 The Operator is invited to make an argument to the Board about why he or she feels that more testing
                 should or should not be conducted. If it is determined that more testing is required, the Operator is
                 required to submit a testing program to the Board. If the Board considers that sufficient testing has
                 been done, it will invite the Operator to submit a well termination program.


4-12             Operator Submits Testing Program to the Board
                 Section 170 of the Newfoundland Offshore Petroleum Drilling Regulations requires every formation to
                 be sampled or tested to obtain fluid flow and reservoir pressure data where an indication exists that
                 the result of such a sample or test would contribute substantially to the evaluation of the formation.
                 Two approaches are recognized for this purpose:
                     •    wireline testing conducted typically in open hole and limited to small-scale investigations
                          confined to the near wellbore; and
                     •    formation flow testing conducted in cased hole, and designed to carry out large-scale
                          investigations beyond the influence and contamination of the near wellbore.

                 Both approaches offer distinct advantages and limitations with respect to well evaluation. If the Board
                 determines that the data offered by well logs is insufficient, the Operator must submit a new testing
                 program to the Board for approval.

                 For exploration wells, the Operator will be expected to include the conducting of a formation flow test
                 over any formation where well porosity, permeability and hydrocarbon saturation (cuttings, cores, logs
                 and wireline tests) indicates potential pay of 5 metres within a 10 metre gross stratigraphic interval as
                 part of the program. For delineation wells, the Operator will be expected to assess the production
                 potential of all distinct hydrocarbon-bearing reservoir zones. For development wells, the Operator
                 may be required to conduct formation flow tests in select development wells for any prospective
                 hydrocarbon bearing reservoir interval that is not targeted for development. This would likely occur in
                 the absence of other strategies for reservoir appraisal.


4-13 to 4-15 Board Decision Regarding the Acceptability of the Testing Program
                 The proposed test program requires the approval of both the Board Chief Conservation Officer
                 (CCO) and Chief Safety Officer (CSO). As part of the approval process, the Operator may be
                 requested to meet with the Board technical staff to discuss the test, and address any questions or
                 concerns that may exist. The Board may at this time request that one of its Conservation Officer’s
                 witness the test. If the Board determines that the program is acceptable, it will issue an approval. If
                 the program is considered to be unacceptable, the Operator may revise and resubmit it.




 4-8                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                        4 – Approval to Drill a Well


4-16           Operator Obtains a Formation Flow Test Approval from the Board
               Pursuant to subsection 171(2) of the Newfoundland Offshore Petroleum Drilling Regulations, the
               Operator is required to obtain written approval from the Board before engaging in any formation flow
               tests. If the Board approves the Operator’s testing program, the formation flow test approval will also
               be issued, and the Operator may conduct the test. Formation flow tests are subject to the requirements
               outlined in sections 172 through 176 of the Newfoundland Offshore Petroleum Drilling Regulations.
               Preliminary test results should be reported to the Board by telephone and should be followed by a
               written report of the test results when they become available. Further information about formation flow
               tests may be found in the “Joint Guidelines Respecting Data Acquisition and Reporting for Well,
               Pool and Field Evaluations in the Newfoundland and Nova Scotia Offshore Areas.”


4-17           Application for Approval to Terminate a Well is Submitted to the
               Board (Suspension, Abandonment, or Completion)
               Pursuant to section 177 of the Newfoundland Offshore Petroleum Drilling Regulations, no person
               shall terminate a well or test hole without an Approval to Terminate that well or test hole issued by
               the Board or any person designated by the Board.

               In order to obtain an Approval to Terminate, the Operator must complete and forward an
               application to the Board, at least 24 hours before the well is terminated (s.178, Newfoundland
               Offshore Petroleum Drilling Regulations). Well terminations may take one of three forms: suspension,
               abandonment, or completion.

               Exploration wells may be either suspended or abandoned. In suspending a well, Operators must
               comply with the procedural requirements outlined in sections 191 and 192 of the Newfoundland
               Offshore Petroleum Drilling Regulations. Suspended wells may be reactivated if the Operator obtains
               an Approval to Re-enter a Well (s. 67(1)(b) Newfoundland Offshore Petroleum Drilling
               Regulations).

               Abandonment is a process whereby an Operator converts a drilled well to a condition that can be left
               indefinitely without further attention and will not damage water supplies, potential petroleum
               reservoirs or the environment.9 In abandoning a well, Operators are expected to comply with the
               procedural requirements outlined in sections 171 through 190 of the Newfoundland Offshore
               Petroleum Drilling Regulations. These include provisions governing:
                   •    the removal of casing;
                   •    the location of abandonment plugs;
                   •    the length and quality of cement plugs;
                   •    feeling for plugs;
                   •    termination of shallow holes; and
                   •    marking of wellheads.




               9
                See: Petroleum Communication Foundation, Our Petroleum Challenge, 6th ed. (subtitled: Exploring
               Canada’s Oil and Gas Industry), 1999, Glossary, at p. 92.


 Newfoundland and Labrador Offshore Guide – January 2004                                                           4-9
 4 – Approval to Drill a Well


                 Well termination for development wells occurs when the Operator initially completes the well in
                 accordance with a well completion program as approved by the Board. This is typically triggered
                 upon the completion of testing of the completed interval, and should coincide with the formal hand-
                 over of the well to production. In completing a well, the Operator must submit to the Board:
                     •    a copy of the completion record for development wells noting the interval perforated and by
                          way of schematic, the equipment installed on the well where it directly affects well production
                          or well evaluation; and
                     •    a copy of any report respecting well stimulation including the date of stimulation, intervals,
                          method, contractor, stimulants, and quantities and results.

                 Development wells are not typically abandoned until the production site is decommissioned. This
                 process is outlined in Chapter 14 of this Guide. Before abandoning a development well, Operators
                 must first obtain an approval from the Board’s Chief Conservation Officer (s. 18(6), Newfoundland
                 Offshore Area Petroleum Production and Conservation Regulations). It is expected that development
                 well termination will be carried out in accordance with an approved Development Plan.


4-18 to 4-20 Board Decision Regarding the Issuance of an Approval to Terminate
             a Well
                 If the Board considers the application to be satisfactory, it will issue an Approval to Terminate, and
                 the Operator will be permitted to suspend, abandon or complete the well. If the Board considers the
                 application to be unsatisfactory, it will not issue the approval, and the Operator may reapply at a later
                 time.


4-21             Well Termination Record Form is Submitted to the Board
                 Once the well is terminated, three copies of the Well Termination Record form, each signed by the
                 senior Operator’s representative responsible for the program, must be forwarded to the Board. This
                 must be done within 21days of the well termination date (s.158, Newfoundland Offshore Petroleum
                 Drilling Regulations). A sample of the Well Termination Record is provided in Appendix A of the
                 “Guidelines Respecting Drilling Programs in the Newfoundland Offshore Area,” January, 2000.

                 The Well Termination Record form typically serves as a release for the Evidence of Financial
                 Responsibility that the Operator submitted with the ADW application. The Board will not release
                 the Applicant’s Evidence of Financial Responsibility until this form is submitted.


4-22             Final Well Report is Submitted to the Board
                 Pursuant to section 201 of the Newfoundland Offshore Petroleum Drilling Regulations, Operators are
                 required to submit a Final Well Report after a well has been terminated. For exploration and
                 delineation wells, three printed copies of the report must be forwarded to the Board within 90 days of
                 the rig release date. For development wells, two printed copies must be submitted within 45 days of
                 the rig release date. Where secondary reports exist which are relevant to the information required in
                 the Final Well Report, such reports should be submitted upon completion of work. Reporting
                 requirements for secondary reports need not be formal. A confirmation letter or ‘file note’




 4-10                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                       4 – Approval to Drill a Well


               accompanying results would suffice. The Operator is requested to submit, where applicable, two
               copies of any of the above information where it exists in digital form.

               Details regarding the content and format of these reports are provided in Appendix D of the
               “Guidelines Respecting Drilling Programs in the Newfoundland Offshore Area.” Information about
               the geological and well evaluation aspects of a Final Well Report can be found in Appendix D of the
               “Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field Evaluations
               in the Newfoundland and Nova Scotia Offshore Areas.”


4-23           Continuing Obligations Associated with Well Termination
               There are a number of operational reporting, submission, and approval requirements associated with
               the termination of exploration, delineation, and development wells. These may include:
               Newfoundland Offshore Petroleum Drilling Regulations
                   •   notifying a Board Conservation Engineer within 24 hours of the hour and date that any
                       drilling rig is released from a well (s. 146(c));
                   •   submitting a record of the details of the manner in which a well has been terminated within
                       21days after the rig release date in respect of the well (s. 158(1));
                   •   submitting on request a sketch illustrating the condition of the well after termination
                       (s. 158(2));
                   •   obtaining an approval to terminate a well or test hole without an Approval to Terminate that
                       well or test hole (s. 177);
                   •   obtaining an approval to leave material or equipment on the sea floor, if such material or
                       equipment will not interfere with the commercial use of the sea (s. 180);
                   •   report on the condition of a completed and suspended well (s. 192(2)(a));
                   •   notifying the chief in writing before disposing of a core and giving the Chief the opportunity
                       to request delivery of that core or portion (s. 198(3)); and
                   •   submitting a Final Well Report within 90 days after rig release (s. 201(2)).

               Requirements exclusive to the termination of development wells may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •   obtaining a Well Operations Program Authorization (s. 17); and
                   •   obtaining an Approval for a Well Operation (s. 18).


4-A to 4-G     Requirements of an Application for a Development Program
               Authorization and/or an Application
               There are a number of additional requirements that are likely to be associated with the seeking of an
               Approval to Drill a Well. While not all of these requirements need to be satisfied when the
               application is first submitted to the Board, all must be in place before the approval will be issued.
               They are described in sections 4-A through 4-G.




 Newfoundland and Labrador Offshore Guide – January 2004                                                        4-11
 4 – Approval to Drill a Well


4-A              Drilling Program Authorization and all Associated Requirements
                 Applicants must hold a Drilling Program Authorization which includes the proposed well for which
                 an Approval to Drill a Well is being sought. The procedure for obtaining a DPA is described in
                 Chapter 3.

                 As part of the DPA, Applicants will have already satisfied a number of other requirements, including
                 the need to obtain and/or submit:
                      •   an Operating Licence (3-A);
                      •   a Canada-Newfoundland Benefits Plan (3-B);
                      •   a Safety Plan (3-C);
                      •   an Environmental Impact Statement and Environmental Protection Plan (3-D);
                      •   an Exploration Licence, Significant Discovery Licence, or Production Licence (3-F);
                      •   Certificate(s) of Fitness (3-G);
                      •   Proof of Financial Responsibility (for the program as a whole) (3-H);
                      •   a Program Description (3-I);
                      •   Approval of a Means for Disposing of Waste Materials (3-M);
                      •   a Declaration of Fitness10 (3-N); and
                      •   additional requirements as specified by the Board (3-O).

                 Holders of a DPA for a development drilling program will have also obtained and/or submitted:
                      •   an Approved Development Plan (3-E);
                      •   an Operations Manual (3-J);
                      •   an Approved Data Acquisition Program (3-K); and
                      •   a Pool, Field (Well) Location Survey (3-L).


4-B              A Seabed Survey
                 The ADW application must be accompanied, or preceded, by the submission of documentation
                 showing that the seafloor and the underlying sediments have been investigated by the Operator. The
                 purpose of this investigation is to identify any potential surface or subsurface hazards.

                 A seabed survey is a geophysical operation, and will be subject to the geophysical program
                 requirements outlined in the Newfoundland Offshore Area Petroleum Geophysical Operations
                 Regulations, and in Chapter 2 of this Guide. Often, seabed surveys for a given area will have been
                 taken well in advance of the seeking of Approval to Drill a Well in that area. Under these
                 circumstances, the carrying out of further surveys may not be required.


4-C              A Well Prognosis
                 The ADW application must be accompanied by a copy of the well prognosis and tentative survey
                 plan of the well location. The specific requirements of these submissions are described in Appendix B
                 of the Board’s “Guidelines Respecting Drilling Programs in the Newfoundland Offshore Area.”


                 10
                   If multiple Operators share one Drilling Program Authorization, a separate Declaration of Fitness may be
                 required for each well within the program.


 4-12                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                            4 – Approval to Drill a Well


4-D            An Approval of the Location of a Well
               Pursuant to subsection 71(1) of the Newfoundland Offshore Petroleum Drilling Regulations, the
               location of a well must be approved by the Board before drilling may commence.

               In addition, it is expected that the surface of a development well shall be selected and the drilling
               procedures for that well designed to ensure that the well intersects the reservoir at a point consistent
               with good reservoir engineering practice. (s. 71(2), Newfoundland Offshore Petroleum Drilling
               Regulations).


4-E            Evidence of Financial Responsibility
               Subsection 163(1) of the C-NAAIA and section 72 of the Newfoundland Offshore Petroleum Drilling
               Regulations require that an Operator provide Evidence of Financial Responsibility, in a form and in
               an amount satisfactory to the Board. This is required as a contingency against potential petroleum
               spill or debris-related claims, to ensure that the Operator completes the drilling program and
               terminates the well, leaving the drill site in a satisfactory condition, and to satisfy the Board that it is
               able to meet other financial liabilities. The limits of absolute liability for spill and debris related claims
               are prescribed by the Canada-Newfoundland Offshore Oil and Gas Spills and Debris Liability
               Regulations.

               Additional information on financial responsibility is provided in the “Guidelines Concerning
               Financial Responsibility for Drilling in the Newfoundland and Nova Scotia Offshore Areas.”


4-F            Well Evaluation Program
               An Operator is required to submit its proposed program for well evaluation before an ADW will be
               issued. The submission should contain the details of the evaluation programs proposed, to the extent
               that such detail is possible prior to commencement of drilling. Issuance of an ADW will be
               dependent, in part, upon whether the programs proposed provide for the comprehensive evaluation of
               the well as required by regulations. During the approval process, the Operator may be requested to
               meet with the Board’s staff to discuss the application and respond to any questions or concerns
               brought forward. The Board will seek to ensure that any program proposed provides for a
               comprehensive evaluation of the well, consistent with the class of well being drilled.

               The requirements for well evaluation are primarily contained in Part VI of the Newfoundland
               Offshore Petroleum Drilling Regulations and apply to:
                   •    drill cuttings;
                   •    cores;
                   •    mud gas monitoring;
                   •    wireline logs; and,
                   •    testing and sampling.

               Programs for exploratory wells should provide a basic evaluation of all intervals and, focus evaluation
               on intervals where hydrocarbons are encountered to ensure that a suitable basis for assessing any
               potential discovery is established.




 Newfoundland and Labrador Offshore Guide – January 2004                                                               4-13
 4 – Approval to Drill a Well


                 Programs for delineation wells should attempt to resolve uncertainties regarding significant
                 hydrocarbon bearing and other relevant intervals in order to enable an assessment of the development
                 potential of the field to be made.

                 It is anticipated that many of the data acquisition requirements for development wells will have been
                 satisfied as part of the Data Acquisition Program that is submitted as part of the Drilling Program
                 Authorization application. As a result, Well Evaluation Programs for development wells are simply
                 intended to resolve any remaining uncertainties regarding targeted production intervals, establish
                 baseline measurements for subsequent production monitoring programs and, provide the level of
                 evaluation outside of targeted production intervals that is necessary to meet regulatory requirements.
                 Any significant changes to the existing Data Acquisition Program must be approved by the Board.

                 Additional information relating to the preparation of Well Evaluation Programs can be found in
                 Part 1 of the “Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field
                 Evaluations in the Newfoundland and Nova Scotia Offshore Areas.”


4-G              Additional Requirements as Specified by the Board
                 The Board retains the authority to request that additional components be included with the Work
                 Authorization application or to authorize standards in lieu of any required regulation.

                 For example, the Board informally requires that Operators set up routine contacts with the Canadian
                 Coast Guard’s Vessel Traffic Services and the Department of National Defence’s Search and
                 Rescue to inform them of operational matters and marine activities such as:
                     •    rig moves resulting from pack ice, icebergs, inspection or any other reasons;
                     •    changes in the location of the drilling installation due to well termination; and
                     •    formation flow testing operations involving flaring of hydrocarbons.

                 Daily radio communications checks are to be conducted with DFO-CCG radio stations to
                 communicate information about these matters. It is expected that the Board will be made aware of
                 these reports.




 4-14                                               Newfoundland and Labrador Offshore Guide – January 2004
                                                                                  5 – Diving Program Authorization



               5.0 DIVING PROGRAM AUTHORIZATION

               Chapter 5 describes the steps followed in the issuance of a Diving Program Authorization for the
               Newfoundland Offshore Area. Chart 5 illustrates these procedures.

               Any diving program related to exploration or drilling for, or the production, conservation, processing
               or transportation of, petroleum requires a Diving Program Authorization from the Board.

               Diving programs are often used in association with drilling programs, well operations programs, or the
               construction of production platforms, but may also be used in support of or in conjunction with any
               number of other operations. It is expected that diving programs associated with development and
               production will have been contemplated in the Operator’s Development Plan.

               The CNOPB requires that the competency of all diving personnel be certified by the Diver
               Certification Board of Canada (DCBC). The DCBC certifies diving personnel including Diving
               Safety specialists based on verification of their training certificates and the experience evidenced by
               their log books and/or other documentation. The CNOPB accepts DCBC certification of diver
               competency without any further review. DCBC information can be found at
               http://www.divercertification.com .

               The processes relating to the issuance of a Diving Program Authorization are set out in the
               C-NAAIA and in various CNOPB regulations, requirements and guidelines. These include:
                   •    the Newfoundland Offshore Area Petroleum Diving Regulations;
                   •    the Newfoundland Offshore Petroleum Installations Regulations;
                   •    the Newfoundland Offshore Certificate of Fitness Regulations;
                   •    Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November
                        1989);
                   •    the “Safety Plan Guidelines;” and
                   •    the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                        the Newfoundland and Nova Scotia Offshore Areas.”

               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               aforementioned documents to ensure they have satisfied all of the requirements set out by the
               CNOPB.


5-1            Application for a Diving Program Authorization is Submitted to the
               Board
               The Applicant initiates the process by applying for a Diving Program Authorization from the Board.
               The application process begins by forwarding three copies of the Diving Program Authorization
               application form to the Board. In addition to the information requested on the application form,
               information is required with respect to diving contractors, diving vessels, diving systems, and diving
               personnel. The specific requirements for each of these positions are described in the Newfoundland
               Offshore Petroleum Diving Regulations.




 Newfoundland and Labrador Offshore Guide – January 2004                                                             5-1
5 – Diving Program Authorization




5-2                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                              5 – Diving Program Authorization


              Diving Contractors
              Before a diving program will be authorized, the Applicant must submit a profile of the contractor,
              including information about the contractor’s background, experience, and safety record.

              Diving Vessels
              The Board requires Applicants to submit information about all vessels used in the program as well.
              This includes:
                  •   a description of the operating history and safety record of the vessel, including diving and
                      non-diving activities;
                  •   vessel certificates from other agencies, see Chapter 19 - Transport Canada Domestic Vessel
                      Inspection and Certification and Chapter 20 - Canada Border Services Agency and
                      Canadian Transportation Agency Coasting Trade Licence;
                  •   information about the vessel’s First Aid Room;
                  •   proof that First Aid or Medical Attendants are on board; and
                  •   proof that Canadian approved abandonment suits are on board.

              Diving Systems
              The Applicant must submit information to the Board about the Diving Systems in use. This includes:
                  •   a schematic drawing showing layout of diving equipment, including tankage, support
                      equipment, control rooms, pressure vessels and a Self-Propelled Hyperbaric Lifeboat
                      (SPHL);
                  •   diving system certificates for tankage, load wires, pressure vessels, and lifting gear;
                  •   details of internal and external communications available to the diving system;
                  •   evidence of readily available weather monitoring. The ability to fax this information to the
                      platform and arrangements for doing so will satisfy this requirement; and
                  •   a copy of procedure and policy regarding operation and control of ROVs working with and
                      around divers and a description of the Ground Fault Circuit Interrupting (GFCI) device.

              Diving Personnel
              The Applicant must submit DCBC Certificates of competency for all diving team members,
              including:
                  •   divers;
                  •   Diving Supervisors;
                  •   the Diving Superintendent;
                  •   the Diving Safety Specialist;
                  •   Life Support Technicians;
                  •   Life Support Supervisors; and
                  •   Diving Program Operators

              The Applicant must also submit Certificates of Competency for all diving program operators and
              demonstrate that adequate numbers of diving program operators are available to cover the scope of
              work.

              The specific requirements for each of these positions are described in the Newfoundland Offshore
              Petroleum Diving Regulations.




Newfoundland and Labrador Offshore Guide – January 2004                                                            5-3
 5 – Diving Program Authorization


                In addition to the submission of the information set out above, there are a number of other
                requirements that must be satisfied before an Authorization will be issued. These include the
                obtaining and/or submitting of:
                    •    an Operating Licence (5-A);
                    •    a Canada-Newfoundland Benefits Plan (5-B);
                    •    a Safety of Plan (5-C);
                    •    an Environmental Impact Statement/Environmental Protection Plan (5-D);
                    •    Certificate(s) of Fitness (5-E);
                    •    Proof of Financial Responsibility (5-F);
                    •    a Program Description (5-G);
                    •    a Declaration of Fitness (5-H);
                    •    DCBC Certificate of Competency (5-I); and
                    •    additional requirements as specified by the Board (5-J).

                These requirements are described in sections 5-A through 5-J, at the end of this chapter.


5-2             Application is Reviewed by the Board (Consultation with Other
                Agencies)
                The Board conducts an internal review of the various components of the application. Input from other
                government agencies is generally sought as part of this process. The agencies that are typically
                consulted by the Board in reviewing an application for a Work Authorization are listed in section 1-2.


5-3 to 5-5      Board Decision Regarding the Issuance of a Diving Program
                Authorization
                Once the Board has reviewed the Work Authorization application and consulted with other agencies,
                as appropriate, it will make a decision to either approve or reject the Authorization. If the Board
                rejects the application, the Applicant may revise the application and reapply for the Authorization. If
                the Board approves the application, and any additional requirements have been satisfied, the Work
                Authorization will be issued and the program may proceed.


5-6             Possible Licences, Permits, Approvals and Authorizations From
                Other Regulatory Agencies
                In addition to the requirements of the Board, and depending on the nature of the project, Applicants
                may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
                may include:
                    •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                         Fisheries and Oceans (Chapter 16);
                    •    a Transport Canada Domestic Vessel Inspection and Certification (Chapter 19);
                    •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                         Licence (Chapter 20);
                    •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                    •    a Citizenship and Immigration Canada Work Permit (Chapter 21).



 5-4                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                 5 – Diving Program Authorization


               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all of these
               approvals have been obtained.


5-7            Continuing Obligations
               After the Work Authorization is issued, the Operator will be subject to continuing obligations. In
               addition to complying with all procedural requirements, Operators are expected to satisfy a variety of
               approval, reporting and submission requirements. These consist of a) ongoing requirements, which
               must be satisfied at regular intervals throughout the program, and b) operational requirements, which
               must only be satisfied under specific circumstances.

               Ongoing Approval, Reporting and Submission Requirements
               Pursuant to the Newfoundland Offshore Area Petroleum Diving Regulations, ongoing approval,
               reporting and submission requirements for a Diving Program may include:
                   •    the keeping of logbooks by Diving Supervisors, to record every dive and to be produced on
                        request (s.51);
                   •    the keeping of a logbook by each diver, to record every dive and to be produced on request
                        (s.63); and
                   •    the keeping of a logbook by the pilot of an atmospheric diving system, to record every dive
                        and to be produced on request (s.69).

               Operational Requirements
               Pursuant to the Newfoundland Offshore Area Petroleum Diving Regulations, operational
               requirements for a Diving Program may include:
                   •    notifying the CSO if a member of the diving crew is involved in an accident, and submitting
                        a report of the accident in the form set out in Schedule III (s. 6(1)(i);
                   •    notifying the CSO in the event of a serious illness involving a member of the diving crew,
                        and submitting a report of the illness in the form set out in Schedule III (s. 6(1)(j);
                   •    submitting a monthly report of all injuries to members of the diving crew to the CSO
                        (s. 6(1)(k); and
                   •    providing notification of dives.


5-A to 5-I     Requirements of an Application for a Diving Program Authorization
               There are a number of additional requirements that are associated with the seeking of a Diving
               Program Authorization. While not all of these requirements need to be satisfied when the application
               is first submitted to the Board, all must be in place before the Authorization will be issued.

               These requirements are described in sections 5-A through 5-J below.

               For programs associated with development, production or decommissioning, some requirements will
               have already been submitted as part of the Applicant’s Development Application. In these cases, the
               Board does not require that they be resubmitted. Rather it is expected that many aspects of the
               program will have been addressed already.


 Newfoundland and Labrador Offshore Guide – January 2004                                                           5-5
 5 – Diving Program Authorization


5-A             Operating Licence
                An Applicant must hold an Operating Licence before a Diving Program Authorization will be
                issued (s. 137, C-NAAIA). The procedure for obtaining an Operating Licence is described in
                section 1-A.


5-B             Canada-Newfoundland Benefits Plan
                A Diving Program Authorization will not be issued until the Board has approved the Applicant’s
                Canada-Newfoundland Benefits Plan. For exploratory diving programs which occur prior to the
                approval of a Development Application, the Applicant will be expected to submit an Exploration
                Benefits Plan. For diving programs that occur after a Development Application has been approved, a
                new Benefits Plan does not have to be appended to the Work Authorization application, although
                additional information may be needed. This is because benefits concerns associated with these
                operations will have been addressed in the Benefits Plan that was submitted as part of the
                Development Application.

                The general requirements associated with the preparation of both Exploration and Development
                Benefits Plans are outlined in section 1-B of this Guide.


5-C             Safety Plan
                Prior to authorizing a Diving Program, the Board will require the Applicant to submit a Safety Plan.
                As part of the Safety Plan, the Applicant must submit to the Board an Emergency Response Plan
                (ERP) for each installation that is to be used in the operation.

                A more specific description of the safety concerns that relate to diving programs can be found in the
                Newfoundland Offshore Area Petroleum Diving Regulations. Given the nature of diving operations,
                which are usually carried on in support of construction, commissioning or inspection operations, the
                Board may consider it necessary to require information as to how the Operator controls or will control
                simultaneous operations that may pose risk to the diving operations or vice versa.

                At minimum, the Applicant must provide the following information:
                    •   information about the safety management system of the contractor (a copy of the contractor’s
                        safety manual);
                    •   a diving procedures manual (including safety and contingency plans for unconscious diver
                        recovery, loss of communications, a lost bell, and hyperbaric evacuation etc.);
                    •   a letter from a CNOPB certified Diving Doctor saying that they are aware of the operation
                        and will be on call on a 24-hour basis for medical emergencies and that the diving operation
                        is in possession of a Diving Medical Kit which conforms to standards;
                    •   written confirmation that an Occupational Safety and Health Committee has been formed
                        and, where applicable, a Safety Representative has been appointed, and the “Right to
                        Refuse Dangerous Work” has been explained to all workers; and
                    •   proof that the diving vessel has on board: two copies of the Newfoundland Offshore Area
                        Petroleum Diving Regulations and copies of CNOPB Accident Report and Monthly
                        Statistics forms.




 5-6                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                                  5 – Diving Program Authorization


               A general description of the Safety Plan requirements is set out in section 1-C of this Guide.


5-D            Environmental Impact Statement/Environmental Protection Plan
               The Board may ask the Applicant to prepare and submit an Environmental Impact Statement (EIS)
               and an Environmental Protection Plan (EPP) to examine the likely environmental effects of the
               proposed diving program. The environmental implications are assessed by the Board and other
               federal authorities by way of a Screening pursuant to CEAA.

               A new EIS/EPP will not typically be required for diving programs that occur during the development
               or production phases of a project. Provisions to protect the environment during the program should
               have already been addressed in the comprehensive EIS that the Applicant submitted as part of the
               Development Application, and in the EPP submitted prior to the issuance of a POA. However,
               additional information may be required.

               A description of the general requirements for Environmental Impact Statements and Environmental
               Protection Plans is provided in section 1-D of this Guide.


5-E            Certificate(s) of Fitness
               The Applicant must hold a Certificate of Fitness for the diving installation and any other installation
               that is used as part of a DPA. If Certificates of Fitness are already in place for all installations that
               are employed in the program, new ones are not required.

               In addition, every holder of a Work Authorization for which a prescribed installation is used must
               appoint an Installation Manager to be in command of the installation. New managers need not be
               appointed if managers are already in place for all installations used in the program.

               The requirements associated with obtaining a Certificate of Fitness and appointing an Installations
               Manager are summarized in section 1-E of this Guide.


5-F            Proof of Financial Responsibility
               The Applicant must provide Proof of Financial Responsibility for any diving program. The financial
               responsibility requirements associated with these programs are described in section 5.7 of the
               “Guidelines Respecting Financial Responsibility Requirements For Work or Activity in the
               Newfoundland and Nova Scotia Offshore Areas.”

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization.

               A general description of the general Proof of Responsibility requirements for any Work
               Authorization are outlined in section 1-F of this Guide.




 Newfoundland and Labrador Offshore Guide – January 2004                                                             5-7
 5 – Diving Program Authorization


5-G             Program Description
                As described in section 1-G, the Applicant is required to provide a detailed description of the aims
                and objectives of the proposed program and any relevant supporting documentation.


5-H             Declaration of Fitness
                The Applicant must submit a Declaration of Fitness to the Board before a diving program will be
                authorized. In practice, the Declaration of Fitness is only submitted to the Board when all other
                requirements, as described in sections 5-A to 5-I, have been fulfilled. The general requirements of a
                Declaration of Fitness are outlined in section 1-H.


5-I             DCBC Certificate of Competency
                The Applicant must submit a Certificate of Competency for all diving personnel, as issued by the
                Diving Certification Board of Canada. The CNOPB accepts DCBC certifications without further
                review.


5-J             Additional Requirements as Specified by the Board
                The Board retains the authority to request that additional components be included with the Work
                Authorization application or to authorize standards in lieu of any required regulation.




 5-8                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                            6 – Exploration Licence



              6.0 EXPLORATION LICENCE

              Chapter 6 describes the steps followed in the issuance of an Exploration Licence (EL) for the
              Newfoundland and Labrador Offshore Area. It also summarizes the process by which the CNOPB
              issues formal interests to explore and develop petroleum resources by posting tracts of nominated
              Crown Reserve lands and submarine areas to be bid on by interested parties. Chart 6 illustrates these
              procedures.

              An Exploration Licence confers, with respect to the portions of the offshore area to which the licence
              applies:
                  •    the right to explore for, and the exclusive right to drill and test for petroleum;
                  •    the exclusive right to develop those portions of the offshore area in order to produce
                       petroleum; and
                  •    the exclusive right, subject to compliance with the other provisions, to obtain a Production
                       Licence (s. 65, C-NAAIA).

              The licence bestows the rights to all fields within a designated area, and is not restricted by depth. It
              is therefore conceivable that the same EL would provide rights to multiple fields, including those that
              are not yet discovered at the time the Licence is issued.

              An Exploration Licence is not a prerequisite for approvals of geophysical, geological, geotechnical or
              environmental surveys.

              The processes relating to the issuance of an Exploration Licence are set out in the C-NAAIA and in
              the various CNOPB regulations, requirements and guidelines. These include:
                  •    the Newfoundland Offshore Area Registration Regulations;
                  •    “The Newfoundland Offshore Area Registration System Guidelines;”
                  •    “Right’s Issuance Process, Newfoundland Offshore Area;”
                  •    “Procedures Regarding Applications for Significant and Commercial Discovery
                       Declarations and Amendments;” and
                  •    “Criteria for a Significant or Commercial Discovery Declaration.”

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              aforementioned documents to ensure they have satisfied all of the requirements set out by the
              CNOPB.




Newfoundland and Labrador Offshore Guide – January 2004                                                             6-1
6 – Exploration Licence




6-2                       Newfoundland and Labrador Offshore Guide – January 2004
                                                                                             6 – Exploration Licence


6-1            Call for Nominations
               The process begins with a nomination of the lands which are to be the subjects of subsequent Calls for
               Bids. The Board initiates the process by declaring a Call for Nominations.

               The Board has established an annual cycle for issuing Calls for Nominations. Typically the Board
               issues a Call for Nominations in the early fall and accepts nominations until November or December.


6-2            Industry Nominates Land
               Industry representatives suggest parcels of land which they would like to have the opportunity to bid
               on.


6-3            Board Assesses Nominations
               The Board is in no way bound to issue a Call for Bids on a nominated parcel of land. The Board
               may choose to amend the plots of land that have been nominated. The Board may also select
               additional plots of land to be included in a Call for Bids. Typically, the Board reviews nominations in
               December and January of each year.


6-4 & 6-5      Decision by the Board Regarding the Issuance of a Call for Bids
               The Board may make a fundamental decision to issue a Call for Bids on nominated or any unclaimed
               parcels of land. This gives all interested parties the opportunity to bid on the designated parcels of
               land.

               The Board may also decide to refrain from issuing a Call for Bids at this time. If this occurs, no Call
               for Bids will be issued. This is not a fundamental decision and is, therefore, not subject to Ministerial
               review.


6-6            Ministerial Review of Fundamental Decision
               The Board decision to issue a Call for Bids is a fundamental decision and must be reviewed by the
               federal Minister of Natural Resources and the provincial Minister of National Resources, who have
               the authority to approve or overrule the decision (s. 32(1), C-NAAIA).

               Sections 31 to 40 of the C-NAAIA set out the procedures that relate to all fundamental decisions of
               the Board. Wherever a decision is stated specifically to be “subject to sections 31 to 40,” it is a
               fundamental decision. The first important concept is that of the “Minister having authority.” Sections
               34-36 set out a procedure whereby every five years the provincial Minister and federal Minister
               determine whether “self-sufficiency and security of supply” exist. If these are determined to exist for
               the particular five-year period, the Provincial Minister is considered to be the Minister having
               authority for all fundamental decisions in that period. If self-sufficiency and security of supply are
               deemed not to exist, it is the Federal Minister that is deemed to be the Minister having authority for
               all fundamental decisions.




 Newfoundland and Labrador Offshore Guide – January 2004                                                            6-3
 6 – Exploration Licence


                There is one exception in relation to the Minister having authority. Section 34 provides that the
                Provincial Minister is the Minister having authority in relation to a decision made pursuant to section
                139(4), approval of Part I of a Development Plan, but that the Federal Minister can override the
                decision of the Provincial Minister if such decision would unreasonably delay the attainment of self-
                sufficiency and security of supply. For the five-year period commencing January 1, 2001 it has been
                determined that self-sufficiency and security of supply exist and therefore the Provincial Minister is the
                Minister having authority in all cases.

                The Minister who does not have authority in relation to a fundamental decision may, upon written
                notice, suspend the approval of the Minister having authority for a period of 90 days.

                Any board decision that is a fundamental decision may not be implemented until approved. A
                Minister is deemed to have approved of a decision 30 days after receipt of the notice of the
                fundamental decision unless they provide written notice to the contrary. The Board may implement
                their decision upon (a) receipt of approval from both Ministers or (b) upon the approval of the
                Minister having authority alone, after the expiry of any suspensive veto exercised by the Minister not
                having authority.


6-7             Call for Bids Issued by Board
                If the Board receives Ministerial approval, it will issue a Call for Bids. When this occurs, a public
                announcement is made. The notice to issue the Call for Bids is posted with various media, including
                the Canada Gazette and any other publication the Board considers appropriate. It will also be
                published on the Board’s website (s. 63 C-NAAIA).

                The Board has established an annual cycle for issuing Calls for Bids. The process usually begins in
                early March and closes in November. Unless otherwise prescribed, a Call for Bids shall be published
                at least 120 days before the closing date for the submission of bids specified in the call (s. 58(5),
                C-NAAIA). Although there is typically only one Call for Bids each year, the Board may issue calls
                more frequently.

                The Call for Bids will set out:
                     •   the type of interest to be issued (Exploration Licence, Significant Discovery Licence or
                         Production Licence);11
                     •   the terms and conditions of the interest;
                     •   the form and manner in which the bid deposit is to be submitted; and
                     •   a closing date (at least 120 days from issuance).

                The Board will also specify the manner in which the bids are to be submitted, and any conditions that
                the bids must adhere to. It will also specify whether Cash Bonus Bids or Work Expenditure Bids will

                11
                  Though typically issued as successor interests, Significant Discovery (chapter 7) or Production Licences
                (chapter 9) may also be issued directly following the Call for Bids process. This may occur in situations where
                exploration drilling has shown that the discovery extends onto crown reserve land. To date, however, the
                CNOPB has only issued Exploration Licences as a direct result of a Call for Bids. Thus, in the interest of
                simplicity, this chapter will only make reference to the issuance of Exploration Licences. The reader should,
                however, keep in mind that any future Call for Bids relating to either Significant Discovery or Production
                Licences would follow the same process.


 6-4                                                  Newfoundland and Labrador Offshore Guide – January 2004
                                                                                               6 – Exploration Licence


               be used as the primary criterion for making its decision. In the case of a Cash Bonus Bid, the Board’s
               decision is based on the amount of money the bidder is willing to pay for rights to the parcel of land.12
               For Work Expenditure Bids, the Board’s decision is based on the amount of money the bidder is
               willing to commit to spend on exploration within the first period (5 years) of the licence. Each work
               expenditure bid must be accompanied by a Bid Deposit in the form of a bank draft or certified cheque
               in the amount of $10,000 (Cdn.) payable to the Receiver General. Furthermore, pursuant to section
               14 of the Board’s Newfoundland Offshore Area Registration Regulations, an issuance fee of $250.00
               for each grid must also be submitted with the package. Bid deposits, issuance fees and cash bids are
               returned to all unsuccessful bidders.


6-8            Bids Submitted by Interested Parties
               Interested parties are invited to submit bids to the Board. A Bid deposit and Security deposit must be
               submitted with the Bid.


6-9            Board Assesses Bids
               The Board conducts an internal review of the bids.


6-10 & 6-11 Decision by the Board to Accept/Reject Bids
               After assessing the bids, the Board determines which applications will be accepted and which will be
               rejected.

               At this point, the Board will issue a public release, which will state the identities of any successful
               bidders and the land parcels that were bid on. The release will also indicate that the bids are subject
               to certain specified terms and conditions.

               If the Board decides not to accept an Applicant’s bid, no Exploration Licence will be issued.
               Similarly, if the Board decides to accept the bid and makes a fundamental decision to issue an
               Exploration Licence to the Applicant, the Exploration Licence will still not be issued if the two
               Ministers, or the one with legislated authority at the time, decide(s) to overrule the Board’s decision.


6-12           Security Deposit Submitted by Successful Bidders
               Pursuant to section 81 of the Canada Petroleum Resources Act, a successful bidder must provide the
               Board with a security deposit equal to 25% of the work expenditure bid. The security deposit must be
               submitted within 15 days of official notification of being a successful bidder. The deposit takes the
               form of a promissory note accompanied by a bank letter of guarantee. Upon receipt of the security
               deposit, the bid deposit is given back to the successful bidder. It is refunded annually in proportion to
               the amount of the work expenditure bid which is expended in that year, as determined in accordance
               with the allowable expenditures included (see Schedule A, “Guidelines, for Allowable

               12
                 Where Significant Discovery Licences or Production Licences are posted, the Board is more likely to decide
               that cash bidding should be used.



 Newfoundland and Labrador Offshore Guide – January 2004                                                                6-5
 6 – Exploration Licence


                Expenditures”). An interest holder is not obligated to perform work. If work is not performed in the
                full amount of the bid, however, the balance of the Work Deposit will be forfeited upon termination of
                the licence.

                The Board also requires the Applicant to pay issuance fees.


6-13 & 6-14 Board Decision Regarding the Issuance of an Exploration Licence
                After the Board has determined that a bid will be accepted, it will make a fundamental decision to
                issue an Exploration Licence to the successful bidder.


6-15            Ministerial Review of Fundamental Decision
                The issuance of an Exploration Licence is a fundamental decision and must be reviewed by the
                provincial and federal Ministers. The Ministers have the authority to approve or overrule the
                fundamental decision.

                Refer to section 6-6 of this Guide for an explanation of the fundamental decision process.


6-16            Exploration Licence Issued
                When the successful bidder has submitted the security deposit and satisfied all of the other
                requirements and the Board’s decision has received Ministerial approval, an Exploration Licence may
                be issued to the successful bidder.

                Typically, Exploration Licences are issued on January 15th of each year.

                The EL applies over a specified term and to an identified parcel of land, allowing for:
                    •    the right to explore for, and the exclusive right to drill and test for petroleum;
                    •    the exclusive right to develop the lands for petroleum production; and
                    •    the exclusive right to obtain a Production Licence (s. 65, C-NAAIA).

                An EL may be issued for a maximum term of nine years. However, where, prior to the expiration of
                the term of an Exploration Licence, the drilling of any well has been commenced on any portion of
                the offshore area to which the EL applies, the EL continues in force while the drilling of that well is
                being pursued diligently and for so long thereafter as may be necessary to determine the existence of a
                significant discovery based on the results of that well (s. 70(1), C-NAAIA).

                The nine-year term is divided into two periods. The licence specifies that the owner must start drilling
                a well before the first period expires (five years commencing on the effective date of the licence). If this
                is not done, the licence terminates at the end of the first period. There are no rentals paid in Period I.
                If the drilling of a well has been commenced during Period I and continues beyond the fifth year of
                that Period, Period I will be further extended for so long as the drilling of that well is being pursued
                diligently.




 6-6                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                            6 – Exploration Licence


               Period II immediately follows Period I and consists of the balance of the term of the EL. In order to
               validate an EL for Period II, the drilling of a well must be commenced within Period I and diligently
               pursued to termination. Failure to comply with this requirement will result in the land parcel reverting
               to Crown land. Forfeiture of a portion of the security deposit depends on whether or not the Operator
               expends the amount they bid for the parcel through any of the work they have undertaken. There are
               no work requirements during Period II, but refundable rentals are payable during Period II. Rentals
               are currently payable in respect of each year of Period II. For Area A, an area of the Jeanne d’Arc
               Basin, rentals are at the rate of $5.00 per hectare for the first year of Period II and increasing by
               $5.00 each year, to a maximum of $15.00 per hectare. For the remainder of the offshore area, rates
               are one-half of these amounts. Rentals are payable annually, in advance, and should be paid by
               cheque or draft payable to the Receiver General for Canada.

               Upon the expiration of Period II, the EL terminates and all lands revert to the Crown except those
               which have been converted to a Significant Discovery Licence or a Production Licence (see Chapters
               7 and 9 of this Guide).


6-17           Holder of Exploration Licence Satisfies Environmental Studies
               Research Fund Requirements and Bid Cheques Returned by the
               Board
               Upon issuance of an EL, the interest owner must pay Environmental Studies Research Fund
               (ESRF) levies under Part VII of the Canada Petroleum Resources Act, and to Division VII of the
               C-NAAIA.

               The purpose of the Environmental Studies Research Fund (ESRF) is to finance environmental and
               social studies pertaining to the manner in which, and the terms and conditions under which,
               exploration development and production activities on frontier lands should be conducted. (s. 76(2),
               Canada Petroleum Resources Act).

               Payments must be made for the year in which the licence is issued, and retroactive levies for the two
               preceding years (less any levies paid in respect of the same lands for the two preceding years by a
               previous interest owner). The amount of such retroactive levies will be specified in the Call for Bids.
               Thereafter, ESRF levies as fixed from time to time by the federal Minister of Natural Resources will
               be payable unless the interest owner surrenders the licence prior to the payment due date. ESRF
               levies vary according to the area covered by the EL. The rate is determined by multiplying the
               number of hectares of land included in the licence by the regional ESRF rate.

               ESRF matters are not administered by the CNOPB, but by a 12-member management board, which
               is currently chaired by a representative of the National Energy Board.

               It is important to note that bid deposit cheques, which were submitted to the CNOPB as described in
               section 6-7 above, are not returned to successful bidders until ESRF levies are paid.




 Newfoundland and Labrador Offshore Guide – January 2004                                                           6-7
6 – Exploration Licence




Notes




6-8                       Newfoundland and Labrador Offshore Guide – January 2004
                                                                       7 – Significant Discovery Declaration and
                                                                                    Significant Discovery Licence

               7.0 SIGNIFICANT DISCOVERY DECLARATION AND
                   SIGNIFICANT DISCOVERY LICENCE

               Chapter 7 describes the steps for issuance of a Significant Discovery Declaration (SDD) and the
               Significant Discovery Licence (SDL), in the Newfoundland and Labrador Offshore Area. Chart 7
               illustrates these procedures.

               A significant discovery is defined by the first well on a geological feature that demonstrates by flow
               testing the existence of hydrocarbons and suggests the accumulation of hydrocarbons has a potential
               for sustained production (s. 47, C-NAAIA).

               After a significant discovery has been made, the Operator may apply for a Significant Discovery
               Declaration in the form and manner and containing such information as may be prescribed (s. 73(1),
               C-NAAIA).

               Although an SDL may be issued directly following a Call for Bids, as mentioned in Chapter 6 of this
               Guide, it is typically an intermediate interest designed to maintain an explorer’s rights during the
               period between the first discovery and eventual production.

               The process of issuing SDDs and SDLs, and approving any amendments thereof, is set out in the
               C-NAAIA and the various CNOPB regulations, guidelines and other documents, such as:
                   •    “Rights Issuance Process: Newfoundland Offshore Area, Canada-Newfoundland Offshore
                        Petroleum Board;”
                   •    “Criteria for a Significant or Commercial Discovery Declaration;” and
                   •    “Joint Guidelines Regarding Applications for Significant or Commercial Discovery
                        Declarations and Amendments, May 2003.” (Joint SDD/CDD Guidelines).

               The following is only a summary of the various requirements; Applicants are advised to consult the
               Accord legislation, regulations, guidelines and other documents to ensure they have met all the
               requirements set out by the CNOPB.


7-1            Significant Discovery Declaration (SDD) Process Initiated
               The Significant Discovery Declaration process may be initiated by the Board or by an Operator
               (ss. 71(1) and (2) C-NAAIA). Prospective Applicants are to inform the Board as early as possible
               that they are planning to submit an application for an SDD.


7-2            Application for Significant Discovery Declaration is Submitted to the
               Board
               Operators wishing to obtain an SDD must submit written applications to the Board. Any information
               provided in this application is strictly confidential.




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7 – Significant Discovery Declaration and
Significant Discovery Licence




7-2                                         Newfoundland and Labrador Offshore Guide – January 2004
                                                                        7 – Significant Discovery Declaration and
                                                                                     Significant Discovery Licence

               Application for a Significant Discovery Declaration or Amendment, unless otherwise agreed to by the
               Board, must be submitted within six months following rig release of the drilling unit respecting the
               prospective discovery well, or six months prior to the scheduled expiry of the Exploration Licence,
               whichever occurs later. This is to ensure that the Board can also plan and administer a land tenure
               system with a greater sense of predictability and efficiency. Application requirements can be found in
               the Joint SDD/CDD Guidelines - CNOPB Attachment 2, and should include at least the following
               (7-2-1 to 7-2-5 below).


7-2-1          Summary of Well(s)
               A written summary of the results of the well(s) on which the application is based, including:
                   •    a description of the hydrocarbon accumulation and its limits;
                   •    a geological description of the hydrocarbon-bearing reservoirs encountered, including their
                        stratigraphic correlation and sedimentological model;
                   •    all formation flow test and wireline formation tester results and analyses;
                   •    pressure-depth plots of wireline formation tester and formation flow test data;
                   •    cored intervals from conventional and mechanical coring tools and results of core and special
                        core analyses; and
                   •    petrophysical analyses of wireline logs, including all log parameters, cut-off values, etc.


7-2-2          Map(s)
               Structure maps in time and depth at a minimum scale of 1:25,000 for seismic markers at or near the
               top of each hydrocarbon-bearing reservoir affecting the area in question, together with velocity
               functions and methodology used for the time to depth conversion. These maps should show:
                   •    fluid contacts as derived from petrophysical and core analyses, and/or pressure-depth plots;
                        and
                   •    erosional, depositional and structural limits of the reservoir unit mapped.


7-2-3          Seismic Cross-Sections
               Selected interpreted seismic sections, in dip and strike directions across the geological feature, tying
               wells drilled and indicating the seismic markers on which structure maps have been drawn in relation
               to the time levels representing hydrocarbon-bearing reservoirs.


7-2-4          Geological Information
               Structural cross-section(s), based on wireline logs, through all wells drilled on the geological feature
               (at a vertical working scale no smaller than 1cm=10m) showing lithologies, sand correlations, fluid
               contacts, formation flow tests and cored intervals.


7-2-5          Other Information
               Additional information and documentation may be required by CNOPB staff following initial review
               of the application.


 Newfoundland and Labrador Offshore Guide – January 2004                                                             7-3
 7 – Significant Discovery Declaration and
 Significant Discovery Licence

7-3             Notice of Preliminary Technical Review
                Once the Board has received the application, it will complete and forward a “Notice of Preliminary
                Technical Review” form13 to the Applicant within 30 days. This form informs the Applicant of the
                date and time at which the Preliminary Technical Review will be held.


7-4             Preliminary Technical Review
                A Preliminary Technical Review takes the form of a meeting between the Board and the
                representatives of the company submitting the application. It is intended to provide an opportunity for:
                       •   discussing the required criteria in determining the existence of a significant discovery;
                       •   engaging in a general review and discussion of the application;
                       •   identifying any actual or potential issues arising from the evidentiary material provided;
                       •   understanding any technical differences of opinion which may arise between any Board
                           representative and a representative of the Applicant; and
                       •   establishing the record and identifying further supplementary information which may be
                           required.

                Preliminary consultations may also take the form of discussions/correspondence between Board
                representatives and representatives of the Applicant, either before or after the Preliminary Technical
                Review. The primary objectives of this part of the process is to enable the Board representatives to
                advise the CEO of the Board and the Applicant submitting the application of any substantive issues
                arising from the Preliminary Technical Review, which may be relevant to the merits of the
                Application.


7-5             Report to CEO/Applicant
                Approximately 30 days after the Preliminary Technical Review, the Board representatives submit a
                written report to the CEO of the Board and to the Applicant seeking the SDD. The report will draw
                attention to any substantive issues which the Board representatives consider to be relevant to the
                merits of the application.


7-6             CEO Makes Recommendation for Board Approval
                Upon receipt of the Preliminary Technical Review report, the CEO of the Board is expected to issue
                a recommendation to the Board regarding the holding of a Hearing.

                If the CEO believes that there are no substantive issues as a result of the Technical Review, he/she
                will make a recommendation that a Hearing should not take place, and that a SDD be made as
                requested by the Applicant.

                If the CEO believes that there are outstanding issues, he/she will recommend that the Board hold a
                formal hearing. He/she will not discuss the issues with the Board members or inform the Board
                members of the opinion or position of the Board representatives who participated in the Preliminary


                13
                     This form can be found in Attachment 5 of the Board’s “Joint SDD/CDD Guidelines.”


 7-4                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                          7 – Significant Discovery Declaration and
                                                                                       Significant Discovery Licence

               Technical Review. The Board will issue a Notice of Hearing which will establish the date, time and
               procedures which will be followed for the Formal Board Hearing.


7-7            Board Decision Regarding the Need for a Hearing
               If the Board approves the CEO’s recommendation that no Hearing be conducted, the Board will not
               set a requirement for a Hearing. In this event, a Notice of Proposed Decision will be sent to all
               directly affected parties.

               If the Board concludes that substantive issues have arisen to justify the holding of a Hearing, it will
               appoint a Review Panel and a Chairman from among the Board members to hear the application.
               The Review Panel is vested with the authority to hear, deliberate and decide on behalf of the Board.


7-7-1          Notice of Pre-Hearing Conference
               If the Board decides that a Hearing is required, it will initiate the process by issuing a Notice of Pre-
               Hearing Conference, typically within 15 days. This notice will be given in the form of a Notice of
               Pre-Hearing Conference form, which will be forwarded to the Applicant by the Board.14 The form
               informs the Applicant of the purpose of the Pre-Hearing Conference and specifies the date and time
               at which it is to take place.


7-7-2          Pre-Hearing Conference
               Approximately 30 days after Notice has been given, a Pre-Hearing Conference (PHC) is held. The
               PHC is not a hearing, but rather is a preliminary meeting intended to:
                      •   bring about an understanding of the differences of opinion and any other substantive issues
                          which may exist between the Applicant and the Board representatives regarding any of the
                          segments of the application;
                      •   identify the witnesses/participants who are to take part in the Hearing;
                      •   review the Rules of Practice and Procedure for the Hearing15;
                      •   confirm the Record including the number, sequence and identification of related exhibits for
                          logistical and evidentiary purposes;
                      •   establish the date and expected duration of the Hearing;
                      •   establish the sequence of evidentiary material and witnesses that the Board representatives
                          and the Applicant will present at the Hearing. This may allow for clarification or
                          explanation of the technical submissions;
                      •   provide the Applicant with a copy of any evidentiary material which a Board representative
                          intends to enter as part of the Record; and
                      •   identify procedural issues.

               The PHC will be chaired by a Board representative and it is expected that the designated
               representatives of the Applicant and the Board will attend.



               14
                    This form can be found in Attachment 7 of the Board’s “Joint SDD/CDD Guidelines.”
               15
                    These rules are discussed in detail in Attachment 9 of the Board’s “Joint SDD/CDD Guidelines.”


 Newfoundland and Labrador Offshore Guide – January 2004                                                             7-5
 7 – Significant Discovery Declaration and
 Significant Discovery Licence

7-7-3           Pre-Hearing Conference Report
                Upon completion of the Pre-Hearing Conference, a report which provides a summary of the events of
                the PHC is prepared by the Board Representatives and is forwarded to the Applicant’s
                representatives for review and approval. If it is approved by the Applicant, the report is added to the
                formal record.


7-7-4           Notice of Hearing
                Prior to the commencement of a Hearing, all documents which have been included in the Record are
                forwarded to the Review Panel for examination. At this point, the Board forwards a “Notice of
                Hearing” form to the Applicant. This form sets the date and time for the Hearing and informs the
                Applicant of the regulations and procedures to be followed in the Hearing.


7-7-5           Hearing by Review Panel
                The Review Panel conducts a Hearing in regard to the application, in accordance with the Hearing
                Rules of Practice and Procedure. Each Hearing proceeds as follows:
                    •    opening statement by the chairman or legal representative;
                    •    resolution of procedural issues;
                    •    Applicant presents submission (opening statement, calling of witnesses);
                    •    Board representatives and Review Panel may examine the Applicant regarding such
                         presentation;
                    •    Applicant re-directs;
                    •    Board representatives may present evidence;
                    •    Applicant and Review Panel may examine Board representatives regarding such
                         presentation;
                    •    Board representatives re-direct;
                    •    Board representatives, Applicant and Review Panel may re-examine; and
                    •    closing statements.


7-7-6           Review Panel Begins Deliberations
                After the conclusion of the Hearing, the Review Panel begins deliberations on the matter. During this
                period, the Panel has the opportunity to direct written questions at either the Board Representatives
                or the Applicant. This questioning must not be done orally, however, to ensure that all
                correspondences are a part of the record.

                The factors determining whether or not a significant discovery exists can be summarized from the
                definition as follows:
                    •    “indicated by the first well on a geological feature” — each significant discovery must relate
                         to a particular well and geological feature identified at the time of the application;
                    •    “that demonstrates by flow testing the existence of hydrocarbons in that feature” — flow
                         testing will be considered as a formation flow test or a wireline formation flow test as
                         described in the Newfoundland Offshore Petroleum Drilling Regulations. Hydrocarbons must
                         be recovered from the testing;



 7-6                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                       7 – Significant Discovery Declaration and
                                                                                    Significant Discovery Licence

                      •   “geological and engineering factors” — having regard to geological and engineering factors
                          effectively means that all reliable information available at the time of the application,
                          including geophysical and petrophysical data, will be considered; and
                      •   “existence of an accumulation of hydrocarbons that has potential for sustained production”
                          — although accumulation and sustained production creates some connotations of volume and
                          economics, the information required is not intended to be commercially supportive in nature.

               The Board takes the view that it is possible to have an accumulation comprising of complex
               interrelated fault blocks, which when combined could constitute a single significant discovery, without
               the need to drill each block. Whether such an accumulation would constitute a single significant
               discovery depends on the merits of each case.


7-7-7          Proposed Decision Report
               Following deliberations, the Review Panel must issue a Proposed Decision Report. The format
               which this report typically follows is outlined in the Board’s “Joint Guidelines Regarding
               Applications for Significant or Commercial Discovery Declarations and Amendments, May 2003.”
               The Proposed Decision Report will be circulated for input from appropriate Board employees
               regarding its format, completeness, consistency, references, technical/legal accuracy and integrity, but
               these persons may not provide counsel respecting the merits of the proposed decision during the
               decision making process.


7-8            Notice of Proposed Decision Given by the Board
               The Board must provide notice of its decision to all affected parties (s. 124(2), C-NAAIA). This is
               done by completing and forwarding copies of the Notice of Proposed Order/Decision/Action form.16
               After notice of the decision has been given, a 30-day notice period must be provided before the
               decision can take effect.


7-9            An Oil and Gas Committee (OGC) Hearing May be Requested
               Within 30 days of the date that the Board has given notice of its proposed decision, any affected party
               may request that an OGC Hearing be held.

               If none of the affected parties request an OGC Hearing within 30 days of the Board’s decision, the
               decision takes effect and the SDD is (or is not) issued.

               If an OGC Hearing is requested by one or more of the affected parties, a notice period must be given
               before the Hearing may take place.


7-9-1          OGC Hearing
               The OGC is vested with the powers of a superior court of record, and has the authority to establish
               rules of practice and procedure for the purpose of conducting the Hearing, as long as these rules are

               16
                    See “CNOPB Attachment 6: Notice of Proposed Order/Decision Action;” Joint SDD/CDD Guidelines.


 Newfoundland and Labrador Offshore Guide – January 2004                                                            7-7
 7 – Significant Discovery Declaration and
 Significant Discovery Licence

                not inconsistent with the Acts. During the Hearing, all affected parties are given the opportunity to
                make representations and introduce documents and witnesses before the OGC. If new material is
                presented or arises over the course of the Hearing which was not discussed during the Board
                Hearing, the OGC shall suspend its Hearing and refer the case back to the Board.


7-9-2           OGC Issues Recommendations
                After the conclusion of the Hearing, the OGC will issue recommendations to the Board in the form
                of a written report. This usually occurs within 90 days of the conclusion of the Hearing.


7-9-3           Board Considers OGC’s Recommendations
                The Board considers the recommendations of the OGC in reaching its decision.


7-9-4           Board Gives Notice of Proposed Decision and Reasons for the Decision
                After receiving the recommendations of the OGC, the Board may decide to issue a SDD (s. 71 and
                s. 78, C-NAAIA). In this case, the Board will forward the OGC report and recommendation and the
                OGC transcript to the Applicant.

                Alternatively, the Board may decide not to issue an SDD. In this case, it will prepare a Decision
                Report which will be forwarded to the Applicant along with the OGC report and recommendation
                and the OGC transcript. In this case, the Decision Report follows the same format as the Proposed
                Decision Report discussed in subsection 7-7-7.

                A third possibility is that the Board will decide to issue an SDD for an area that is either smaller or
                larger than the one applied for.


7-10 to 7-16 Board Decision Regarding the Issuance of a Significant Discovery
             Declaration
                After giving notice, the Board will make an official decision regarding the issuance of the SDD.

                If the Board accepts the request for an SDD as applied for, the SDD will be issued. If, however, the
                Board decides not to issue the SDD or decides to issue an SDD that differs from the one applied for,
                the Applicant has the option of requesting a judicial review. The judicial review is an appeal process,
                through which the Applicant may seek to have the Board’s decision overturned. Any affected party
                may exercise the rights of judicial review within 30 days of the date on which the Decision Report is
                issued.

                If the judicial review upholds the Board’s decision to not issue an SDD, or to issue an SDD for an
                area that differs from the one applied for, the Applicant may still ask to have the lands reconsidered at
                a later time.

                The Board may, at any time after making the Significant Discovery Declaration, make an order
                requiring the interest owner to drill a well on any portion of the significant discovery area that is



 7-8                                               Newfoundland and Labrador Offshore Guide – January 2004
                                                                         7 – Significant Discovery Declaration and
                                                                                      Significant Discovery Licence

               subject to that interest and to commence the drilling within one year after the making of the order or
               within such longer period as the Board specifies in the order (s. 76(1), C-NAAIA).

               Under certain circumstances, the Board may amend or revoke the Declaration at a later time.


7-17           Application for Significant Discovery Licence (SDL) Submitted to the
               Board
               The rights holder for an area of the offshore which has been designated as a significant discovery may
               choose to apply for a Significant Discovery Licence (SDL).

               The rights conferred by the SDL are as follows:
                    •     the right to explore for, and the exclusive right to drill and test for petroleum;
                    •     the exclusive right to develop those portions of the offshore area in order to produce
                          petroleum; and
                    •     the exclusive right, subject to compliance with the other provisions of the Act, to obtain a
                          Production Licence. (s. 72, C-NAAIA).

               An SDL confers rights to all fields within the specified area, and is not restricted by depth. It is
               therefore conceivable that the same SDL would confer rights to multiple fields, including those that
               are not yet discovered at the time the Licence is issued.

               An SDL may be obtained in one of two ways:
               1)       If a Significant Discovery Declaration is in effect for all portions of the area, and the area is
                        subject to an Exploration Licence or share therein held in accordance with section 66 of the
                        Act, the interest holder may apply to be issued an SDL for all portions of the significant
                        discovery area that are subject to the Exploration Licence or the share (s. 73(1), C-NAAIA).

               2)       If a Significant Discovery Declaration is in effect which extends to a Crown reserve area, the
                        Board may, after issuing a Call for Bids in relation to that Crown reserve area or any portion
                        thereof, select a bid submitted in response to the Call and, in accordance with subsection 59(1)
                        of the Act, issue an SDL to the successful bidder (s. 73(2), C-NAAIA).


7-18           Application is Reviewed by the Board for Accuracy and Consistency
               The Board conducts an internal review of the request for an SDL to ensure that all of the information
               presented by the Applicant is accurate and consistent with existing knowledge about the lands in
               question.


7-19           SDL is Issued
               If there are no problems with the application, the Board will issue a Significant Discovery Licence.
               SDLs are typically issued in January of each year. Upon issuance of an SDL, any ELs for those
               areas to which the SDL applies cease to have effect.




 Newfoundland and Labrador Offshore Guide – January 2004                                                                 7-9
 7 – Significant Discovery Declaration and
 Significant Discovery Licence

                In certain cases, the decision to issue an SDL may be a fundamental decision of the Board, although
                this has not yet occurred in practice. If terms or conditions are attached to the SDL or if the SDL is
                the result of a Call for Bids (this would be an unusual situation) as outlined in Chapter 6 of this
                Guide, the decision to issue the SDL would be a fundamental decision requiring ministerial review.
                Refer to section 6-6 of this Guide for a description of the fundamental decision process.


7-20            Continuing Obligations
                The Applicant may be subject to continuing obligations, as specified by the Board.




 7-10                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                           8 – Commercial Discovery Declaration




              8.0 COMMERCIAL DISCOVERY DECLARATION

              Chapter 8 describes the steps for decisions on Commercial Discovery Declarations in the
              Newfoundland and Labrador Offshore Area. Chart 8 illustrates these procedures.

              Once the Operator has determined that a significant discovery may support commercial operations,
              an application may be made for a Commercial Discovery Declaration (CDD) pursuant to s. 78(1),
              C-NAAIA. The Board can also make a determination on its own initiative.

              The process of issuing CDDs and approving any amendments thereof, is set out in the C-NAAIA
              and the various CNOPB regulations, guidelines and other documents, such as:
                  •    “Rights Issuance Process: Newfoundland Offshore Area, Canada-Newfoundland Offshore
                       Petroleum Board;”
                  •    “Criteria for a Significant or Commercial Discovery Declaration;” and
                  •    “Joint Guidelines Regarding Applications for Significant and Commercial Discovery
                       Declarations, May 2003” (Joint SDD/CDD Guidelines).

              A “Commercial Discovery” is defined as “a discovery of petroleum that has been demonstrated to
              contain petroleum reserves that justify the investment of capital and effort to bring the discovery to
              production” (s. 47, C-NAAIA). Unlike a significant discovery, a commercial discovery is not
              manifested or identifiable by the results of one particular well or with respect to one geological feature.
              In analyzing the meaning of commercial discovery, the main factors may be summarized from the
              definition as follows:
                  •    “demonstrated to contain” — the word demonstrate means “to derive from admitted
                       premises by steps of reasoning which admit of no doubt; to prove indubitably. To show or
                       prove value or merits by operation, reasoning, or evidence” (Black’s Law Dictionary — 5th
                       Ed.). The choice of words would indicate, insofar as the existence of petroleum reserves is
                       concerned, that there is no sense of futurity or what might be. It relates to past events which
                       are in support of the information which exists now;
                  •    “petroleum reserves” — in giving meaning to this term, the Board has adopted and applied
                       petroleum reserves to mean those volumes of hydrocarbons determined by drilling, testing
                       and interpretation of geological, geophysical and engineering data, that are considered to be
                       recoverable under present and anticipated economic conditions using current technology.
                       The volumes of hydrocarbons considered include the full range of proven, probable, expected
                       and possible reserves; and
                  •    “justify the investment of capital and effort” — in considering this part of the definition, the
                       petroleum reserves must be sufficiently commercial to justify the cost and effort to produce
                       them. In practice, it makes sense that the Applicant will take the initiative and assess whether
                       or not there are economic merits to proceed with development and production of the
                       discovery. That is not to say however that the Board, in exercising its own initiative to make
                       such a declaration, could not take a position regarding justification for such an investment of
                       capital and effort (s. 4(a) “Criteria for a Significant or Commercial Discovery
                       Declaration”).




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8 – Commercial Discovery Declaration




8-2                                    Newfoundland and Labrador Offshore Guide – January 2004
                                                                           8 – Commercial Discovery Declaration


               In determining the existence and extent of a commercial discovery, the test may be summarized as
               follows:
                   •    the information submitted by the Applicant is reliable;
                   •    based on that information, there are reasonable grounds to believe that, on the balance of
                        probabilities there exists a discovery of petroleum:
                        −    that has been demonstrated to contain petroleum reserves (i.e. volumes of hydrocarbons
                             determined by drilling, testing and interpretation of geological, geophysical and
                             engineering data, that are considered to be recoverable under present and anticipated
                             economic conditions using current technology. The volumes of hydrocarbons considered
                             include the full range of proven, probable, expected and possible reserves);
                        −    that such reserves justify the investment of capital and effort to bring the discovery to
                             production; and
                        −    that such a discovery may extend into that portion of the offshore area referred to as the
                             commercial discovery area (s. 4(b) “Criteria for a Significant or Commercial Discovery
                             Declaration”).

               The issuance of a Commercial Discovery Declaration does not supersede any existing Significant
               Discovery Declaration for those lands.

               The following sections are only a summary of the various requirements; applicants are advised to
               consult the Accord legislation, regulations, guidelines and other documents to ensure they have met all
               the requirements set out by the CNOPB.

               The processes through which SDDs and CDDs come to be issued are virtually identical.
               Accordingly, this chapter will make frequent referrals back to Chapter 7.


8-1            Commercial Discovery Declaration (CDD) Process Initiated
               The Commercial Discovery Declaration (CDD) may be initiated by the Board or by an Operator
               (ss. 78(1) and (2), C-NAAIA). An Operator may choose to suspend the project at a future date and
               relinquish a Significant Discovery Licence, rather than proceed to commercial production. However,
               if the Operator is at all interested in production activities, the CDD is required prior to applying for a
               Production Licence. Prospective Applicants are to inform the Board as early as possible that they are
               planning to submit an application for a CDD.


8-2            Application for Commercial Discovery Declaration is Submitted to
               the Board
               Applicants wishing to obtain a CDD must submit written applications to the Board. Any information
               provided in this application is strictly confidential.

               Application for a Commercial Discovery Declaration or Amendment, unless otherwise agreed to by
               the Board, must be submitted within six months following rig release of the drilling unit respecting the
               prospective discovery well, or six months prior to the scheduled expiry of the Exploration Licence,
               whichever occurs later. This is to ensure that the Board can also plan and administer a land tenure
               system with a greater sense of predictability and efficiency. The following list of information is



 Newfoundland and Labrador Offshore Guide – January 2004                                                             8-3
 8 – Commercial Discovery Declaration


               identical to that required for the purposes of the SDD (Chapter 7, 7-2-1to 7-2-5) and is not
               reproduced here.


8-3            Notice of Preliminary Technical Review
               Once the Board has received the application, it will complete and forward a “Notice of Preliminary
               Technical Review” form to the Applicant. This form informs the Applicant of the date and time at
               which the Preliminary Technical Review will be held.


8-4            Preliminary Technical Review
               Refer to section 7-4.


8-5            Report to CEO/Applicant
               Refer to section 7-5.


8-6            CEO Makes Recommendation for Board Approval
               Refer to section 7-6.


8-7            Board Decision Regarding the Need for a Hearing
               Refer to section 7-7.


8-7-1          Notice of Pre-Hearing Conference
               Refer to subsection 7-7-1.


8-7-2          Pre-Hearing Conference
               Refer to subsection 7-7-2.


8-7-3          Pre-Hearing Conference Report
               Refer to subsection 7-7-3.


8-7-4          Notice of Hearing
               Refer to subsection 7-7-4.




 8-4                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                           8 – Commercial Discovery Declaration


8-7-5          Hearing by Review Panel
               Refer to subsection 7-7-5.


8-7-6          Review Panel Begins Deliberations
               Refer to subsection 7-7-6.


8-7-7          Proposed Decision Report
               Refer to subsection 7-7-7.


8-8            Notice of Proposed Decision Given by the Board
               Refer to section 7-8.


8-9            Board Determines Whether an Oil and Gas Committee (OGC)
               Hearing is Required
               Refer to section 7-9.


8-9-1          OGC Hearing
               Refer to subsection 7-9-1.


8-9-2          OGC Issues Recommendations
               Refer to subsection 7-9-2.


8-9-3          Board Considers OGC’s Recommendations
               Refer to subsection 7-9-3.


8-9-4          Board Gives Notice of Proposed Decision and Reasons for the Decision
               Refer to subsection 7-9-4.




 Newfoundland and Labrador Offshore Guide – January 2004                                   8-5
 8 – Commercial Discovery Declaration


8-10 to 8-16 Board Decision Regarding the Issuance of a Commercial Discovery
             Declaration
               After giving notice, the Board will make an official decision regarding the issuance of the CDD.

               If the Board accepts the request for a CDD as applied for, the CDD will be issued. If, however, the
               Board decides not to issue the CDD or decides to issue an CDD that differs from the one applied
               for, the Applicant has the option of requesting a judicial review. The judicial review is an appeal
               process through which the Applicant may seek to have the Board’s decision overturned. Any affected
               party may exercise the rights of judicial review within 30 days of the date on which the Decision
               Report is issued.

               If the judicial review upholds the Board’s decision to not issue a CDD, or to issue a CDD for an area
               that differs from the one applied for, the Applicant may still ask to have the lands reconsidered at a
               later time.

               Holders of a CDD are under no obligation to develop the field, unless there are directed to do so by
               the Board.

               The CDD is not subject to a time limit. Rather, barring any amendment or revocation by the Board,
               it remains in place for as long as a commercial discovery is believed to exist. For this reason,
               Operators typically wait until they are completely ready to produce before they convert their CDD
               into a Production Licence, which has a time limit of 25 years.

               Under section 79, C-NAAIA, the Board can, at any time after issuing a CDD, give notice to the
               interest owner that it may issue a Development Order that reduces the term of the interest. A term of
               not less than six months is provided for the interest owner to make submissions to the Board about
               whether the Board should make such an Order. The Board may adjust the time periods contained in
               a Development Order. Where commercial production of petroleum commences before the expiration
               of the period specified in the Development Order, the Order ceases to have effect.




 8-6                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                                             9 – Production Licence



               9.0 PRODUCTION LICENCE

               Chapter 9 describes the steps for regulatory approvals required to obtain a Production Licence for oil
               and gas production in the Newfoundland and Labrador Offshore Area. These processes are
               illustrated on Chart 9.

               Though a Production Licence may be issued as a direct result of a Call for Bids, as discussed in
               Chapter 6 of this Guide, it is typically a successor right, following the issuance of a Commercial
               Discovery Declaration.

               Pursuant to section 80 of the C-NAAIA, a Production Licence (PL) confers with respect to the
               portions of the offshore area to which the licence applies:
                   •    the right to explore for, and the exclusive right to drill and test for petroleum;
                   •    the exclusive right to develop those portions of the offshore area in order to produce
                        petroleum;
                   •    the exclusive right to produce petroleum from those portions of the offshore area; and
                   •    title to the petroleum produced (s. 80(1), C-NAAIA).

               A PL, like an EL or an SDL, confers rights to all fields within the specified area, and is not
               restricted by depth. It is therefore conceivable that the same PL would confer rights to multiple fields,
               including those that are not yet discovered at the time the Licence is issued. For example, the rights
               for both the Hibernia field and the Avalon field above it are provided by the same PL.

               A Production Licence is issued for a term of 25 years. Extensions are automatic if commercial
               production is underway at the end of the term. If production has ceased but it is possible that
               production might recommence at some time in the future, the Licence qualifies for extension
               (ss. 84(1) to 81(4), C-NAAIA). No PL may be held by any person other than a corporation
               incorporated in Canada (s. 84, C-NAAIA).

               The process of issuing a Production Licence is set out in the C-NAAIA. The following is only a
               summary of the various requirements. Applicants are advised to consult the legislative provisions
               themselves to ensure that they are in compliance with these requirements.


9-1            CDD Exists for the Lands in Question
               Before an application for a Production Licence will be considered, a Commercial Discovery
               Declaration (CDD) must be in effect for the lands in question. The process required to have a
               commercial discovery recognized is described in Chapter 8 of this Guide.


9-2            Application for a Production Licence is Submitted to the Board
               Persons or corporations possessing title to lands which are subject to CDDs may seek to obtain a
               Production Licence. Those wishing to obtain a PL must submit a written application to the Board.




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9 – Production Licence




9-2                      Newfoundland and Labrador Offshore Guide – January 2004
                                                                                                9 – Production Licence


               If the holder of an SDL for a commercial discovery area wishes to obtain a PL, the Board is
               obligated to issue the licence, even if the field extends onto lands that are licenced to other interest
               holders. In these cases, the Licence is issued pursuant to section 81(1)(a) of the C-NAAIA. Unless
               terms and conditions are added to the Licence, the Board’s decision to issue the PL is not a
               Fundamental Decision, and is, therefore, not subject to review by the two Ministers. Under section
               81(1)(a), it is possible for the Board to issue several PLs for the same field, provided that the
               holdings of each of the interested parties contain commercial discoveries.

               In some cases, holders of SDLs for lands which are subject to Commercial Discovery Declarations
               delay applying for a PL until they are ready to begin production of the field. This is done in an effort
               to ensure that the licence does not expire before commercial production begins.


9-3            Application is Reviewed by the Board
               The Board conducts an internal review of the application. If the application for a PL is forwarded by
               only one interest holder with an SDL for the area in question, this review typically involves a simple
               determination of whether all of the information presented in the application is accurate and consistent
               with existing knowledge about the lands in question.

               If multiple interest holders are involved, a more extensive review is likely to be required.


9-4 to 9-6     Decision by the Board Regarding the Issuance of a Single
               Production Licence to Multiple Interest Holders or if
               Terms/Conditions are Attached
               The decision by the Board regarding the issuance of a single Production Licence to multiple interest
               holders or if terms or conditions are attached, is a fundamental decision pursuant to paragraph
               81(1)(b) of the C-NAAIA. As such, it must be reviewed by the federal Minister of Natural
               Resources and the provincial Minister of Mines and Energy, who have the authority to approve or
               overrule the Board's fundamental decision (s. 32(1)(a), C-NAAIA).

               Refer to section 6-6 of this Guide for a description of the fundamental decision process.

               If the Ministers do not approve the fundamental decision to issue the PL, the PL will not be issued
               for the lands.


9-7            Production Licence is Issued
               Subject to section 87 of the C-NAAIA, the Board, on application made in the form and manner and
               containing such information as may be prescribed:
                    •   shall issue a Production Licence to one interest owner, in respect of any one commercial
                        discovery area or portion thereof that is subject to an Exploration Licence or a Significant
                        Discovery Licence held by that interest owner (s. 81(1)(a), C-NAAIA)17; and

               17
                 The issuance of Production Licences in accordance with section 81(1)(a) is not a fundamental decision and,
               therefore, is not subject to review by the two Ministers.


 Newfoundland and Labrador Offshore Guide – January 2004                                                               9-3
 9 – Production Licence


                    •     may, subject to such terms and conditions as may be agreed on by the Board and the relevant
                          interest owners and to sections 31 to 40, issue a Production Licence to:
                          i)     one interest owner, in respect of two or more commercial discovery areas or portions
                                 thereof that are subject to an EL or an SDL held by that interest owner; and
                          ii)    two or more interest owners, in respect of one or more commercial discovery areas or
                                 portions thereof that are subject to an EL or an SDL held by any of those interest
                                 owners (s. 81(1)(b), C-NAAIA).18

               In most cases, the lands to which a proposed PL would apply are already under licence, such as an
               EL or SDL. There is, therefore, an interest in the land that would continue irrespective of the
               decision regarding PL issuance. Upon the issuance of a PL, any SDLs or ELs applying to the lands
               covered by the PL cease to be in effect (s. 85(1), C-NAAIA) but continue for the lands otherwise the
               subject of SDLs or ELS. The PL is issued for a period of 25 years from the date of issuance (s.
               84(1), C-NAAIA).


9-8            Amendments May Be Proposed
               Under certain circumstances, a PL may be amended or revoked in accordance with sections 82, 83,
               or 84 of the Act.

               Where a commercial discovery area in relation to a Commercial Discovery Declaration is decreased or
               increased, as a result of further drilling, the Production Licence that was issued on the basis of that
               declaration shall be amended by decreasing or increasing accordingly the portions of the offshore area
               subject to that licence (ss. 83(1) and (2), C-NAAIA).

               The process for amending a Production Licence is the same as that for issuing a PL under paragraph
               81(1)(a) of the C-NAAIA.




               18
                The issuance of Production Licences in accordance with section 81(1)(b) is a fundamental decision and
               must be reviewed by the two ministers. The Terra Nova development is an example of such an issuance.


 9-4                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                  10 – Development Application



               10.0 DEVELOPMENT APPLICATION

               Chapter 10 describes the procedures associated with the submission of a Development Application,
               for the Newfoundland and Labrador Offshore Area. Chart 10 illustrates these procedures.

               In general, a Development Application is composed of a Development Plan, a Canada-
               Newfoundland Benefits Plan, and a Development Application Summary. In most cases, the Board
               requires that a number of additional components be submitted as well.

               The purpose of the Development Plan is to provide the Board with information concerning all aspects
               of the development. It outlines the work that is to be done during subsequent phases of the project,
               and the procedures which will be used in completing this work. Work Authorizations associated with
               the project development, production and decommissioning stages of a project will not be issued until
               the Operator’s Development Plan has been approved by the Board.

               The processes relating to the submission of a Development Application are set out in the C-NAAIA
               and in various CNOPB regulations and guidelines. These include:
                   •   the “Development Application Guidelines: Newfoundland Offshore Area;”
                   •   the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                       the Newfoundland and Nova Scotia Offshore Areas;” and
                   •   the “Safety Plan Guidelines.”

               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               aforementioned documents to ensure they have satisfied all of the requirements set out by the
               CNOPB.


10-1           Applicant Verbally Informs the Board of the Intention to Develop
               An Applicant wishing to develop a pool or field in the Newfoundland and Labrador Offshore Area
               should make the Board aware of its intention as early as possible, and should arrange for a meeting
               with the Board to discuss the proposal. After obtaining advice and recommendations from the Board,
               the Applicant files written notice of its development proposal.


10-2           Applicant Files Development Application with the Board and Holds
               Public Information Sessions
               After giving the Board written notice of the proposed development project, the Applicant submits a
               Development Application to the Board for review. The following documents must be included with
               every Development Application:
                   •   a Development Plan (10-A);
                   •   a Canada-Newfoundland Benefits Plan (10-B); and
                   •   a Development Application Summary (10-C).




 Newfoundland and Labrador Offshore Guide – January 2004                                                       10-1
10 – Development Application




10-2                           Newfoundland and Labrador Offshore Guide – January 2004
                                                                                           10 – Development Application


               The Board also typically requires a number of auxiliary documents including:
               •      a Safety Plan (10-D);
               •      an Environmental Impact Statement/Environmental Protection Plan (10-E);
               •      a Socio-Economic Impact Statement (10-F);
               •      Proof of Financial Responsibility (10-G); and
               •      additional requirements as specified by the Board (10-H).

               These requirements are described in sections 10-A through 10-H, at the end of this chapter.
               Although public information sessions are not formally required by the Board at this time, in practice,
               many Applicants have decided to hold them at or around this stage in the process. These sessions will
               typically focus on a wide range of issues, including benefits matters and the forecasted environmental
               impacts of the proposed development.


10-3 & 10-4 Project Description in Development Application Sent to CEAA
               The Board is a federal authority pursuant to the Canadian Environmental Assessment Act. Since the
               issuance of a Production Licence would follow the approval of a Development Application, the
               CEAA environmental assessment process generally is triggered.19 In order to ascertain whether or not
               CEAA will be triggered, a CEAA project description is submitted with the written notice of the
               development proposal. For more details on the CEAA environmental assessment process, see Chapter
               15 of this Guide.


10-5           Application is Reviewed by the Board (Consultation with Other
               Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. The agencies that are typically
               consulted by the Board in reviewing a Development Application are listed in section 1-2. The Board
               will consider whether or not the application is complete and may reject it on this basis. The
               application can be revised and re-submitted.


10-6           Board Distributes Development Project Information to the Public
               Whether or not the Board’s public review process is initiated, the Board will ensure that the
               Applicant’s Development Application Summary is publicly distributed. It will also ensure that all of
               the other Development Application documents are made accessible to the public. The Board will
               then invite written submissions from interested parties, and will make those submissions available to
               the Applicant and to the public.




               19
                    For more details on the contents of the project description, see the CEAA website at: www.ceaa.gc.ca.



 Newfoundland and Labrador Offshore Guide – January 2004                                                                    10-3
 10 – Development Application


10-7           Board Determines Whether the Development Project Will Be Subject
               to Public Review
               As mentioned in the general description of the Board’s mandate set out in Appendix A of this Guide,
               the Board has the discretion to determine whether the project will be subject to a public review.
               Despite the existence of these discretionary powers, public reviews are almost always carried out.
               Also, it is important to note that as a federal authority, the Board’s public review process will likely be
               coordinated with CEAA processes (see Chapter 15 for further details).


10-8 & 10-9 Board Appoints a Commissioner or Member(s) to the Review Panel
            and Sets Terms of Reference
               If a public review is needed, the Board will appoint a Commissioner or members to a Review Panel.
               The Board will then give public notice of the appointment and, immediately thereafter, provide the
               Commissioner or Review Panel with the Applicant’s Development Application documents. Upon
               establishing the Commissioner or Review Panel, the Board will set the terms of reference. The
               Commissioner or Panel can request further information.


10-10          Public Hearings Conducted
               The Commissioner or Review Panel is expected to:
                   •    conduct public hearings in relation to the proposed development;
                   •    examine and review the plans and statements referred to it by the Board;
                   •    provide to any interested parties an opportunity to be heard and/or to make written
                        submissions for hearing procedures established by the Board. These submissions will, in
                        turn, be made available for public review; and
                   •    exercise those powers which may be issued to the panel members as commissioners under the
                        Public Inquiries Act of the province or under Part I of the federal Inquiries Act.


10-11          Commissioner or Review Panel Submits Findings to the Board and
               the Two Ministers
               The Commissioner or Review Panel is expected to submit a report of its findings to the Board and
               the provincial and federal Energy Ministers. Recommendations are due no later than 270 days
               following receipt of the application. It must also submit any additional recommendations that it may
               have to the Board.


10-12          Board Considers the Recommendations of the Review Panel
               The Board considers the reports of the Commissioner or Review Panel and any comments offered by
               those government departments and agencies that have been consulted during the review of the
               Development Application as well as any submissions from interested parties.




 10-4                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                                    10 – Development Application


10-13          CNOPB Conducts Internal Review
               The CNOPB will conduct its own internal review of the application whether or not there is a public
               review process.


10-14 & 10-15 Board Decision Regarding Benefits Plan
               Under the C-NAAIA, the Board must issue separate decisions regarding the acceptability of the
               Canada-Newfoundland Benefits Plan and that of Part I of the Development Plan. In issuing a
               decision report on the Benefits Plan, the Board will take into consideration the findings and
               recommendations of the Commissioner or Review Panel (if such was established), the comments and
               advice received from federal and provincial departments and agencies, submissions from interested
               parties, and the results of its own internal review. Approval of the Benefits Plan is a statutory
               condition precedent to the approval of Part I of the Development Plan.


10-16 & 10-17 Board’s Fundamental Decision Regarding Development Plan
               If the Board determines both the Canada-Newfoundland Benefits Plan and Part I of the
               Development Plan to be acceptable, it will issue a fundamental decision to accept the entire
               Development Plan. If the Development Plan is rejected by the Board, the Applicant may revise the
               application and re-submit.


10-18          Ministerial Review of Fundamental Decision
               The fundamental decision of the Board on Part I of the Development Plan must be reviewed by the
               federal Minister of Natural Resources and the provincial Minister of Natural Resources, who have
               the authority to approve or overrule the fundamental decision (s. 32(1)(a), C-NAAIA).

               Refer to section 6-6 of the Guide for a description of the fundamental decision process.


10-19          Board Accepts Development Application/Decision Report Prepared
               If the Board’s fundamental decision to accept the Development Plan is not overturned by the
               Ministers, the Development Plan will be approved by the Board and the Development Application
               will be accepted. The Board prepares a Decision Report.

               Pursuant to section 6 of the Newfoundland Offshore Production and Conservation Regulations and in
               accordance with subsection 139(4) of the C-NAAIA, Operators must apply to the Board for
               approval if an amendment to the Development Plan is required. Amendments are required in cases
               where:
                   •   the Operator proposes to:
                       −   make significant changes in the nature or timing of development activities of the pool or
                           field,
                       −   make substantial modifications or additions to existing production facilities at the pool or
                           field, or



 Newfoundland and Labrador Offshore Guide – January 2004                                                         10-5
 10 – Development Application


                        −    initiate, in the pool or field, a pilot scheme or reservoir depletion scheme that differs from
                             the one set out in the approved development plan.
                   •    pool performance or new geological information shows that the recovery method needs to be
                        changed to achieve maximum recovery of petroleum reserves from the pool or field; or
                   •     increased ultimate recovery of petroleum would be economically obtainable by adopting new
                        technology or methodology.


10-20          Public Notification
               The Board provides public notification of its decision on the Development Application.


10-21          Continuing Obligations
               The Applicant will be subject to continuing obligations as specified by the Board. Further approvals
               may be required for subsequent modifications to any of the components of the initial plan.

               With respect to decommissioning operations, the Board generally requires that if a fixed platform is
               required to be removed as a result of a Development Plan Approval, its original design should be
               such as to facilitate that removal without significant effect on navigation or the marine environment.
               Any deviation from the Decommissioning Plan as set out in the approved Development Plan must be
               approved by the Board before it is carried out. See Chapter 14 of this Guide for more details on the
               Decommissioning process.


10-A to 10-H Requirements of a Development Application
               There are a number of requirements that are likely to be associated with the Development
               Application. These requirements are described in sections 10-A through 10-H. While not all of these
               requirements need to be satisfied when the application is first submitted to the Board, all must be in
               place before the Authorization will be issued.
               It is important to note that once submitted, the requirements of the Development Application may
               satisfy a number of requirements for other subsequent Authorizations. In these cases, the Board does
               not require that they be resubmitted.


10-A           Development Plan
               The main purpose of the Development Plan is to provide the Board with a description of all phases of
               the development process. A second objective is to provide sufficient information to enable the Board
               to conduct a public review of the proposed activities, if it considers such a review to be necessary. If a
               public review is not considered to be necessary, the Development Plan serves to provide information
               about the proposed activities to the general public.

               The Development Plan is to be divided in two parts.




 10-6                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                                  10 – Development Application


              Part I of Development Plan
              The first part of the Development Plan provides a description of the Applicant’s plans for the
              development of the pool or field. It includes:
                  •   an overall description of the approach to be used in the development of the pool or field;
                  •   a description of the alternatives considered for the development of the pool or field, with a
                      rationale for selecting the proposed mode of development;
                  •   a description of the geological setting and features of the field and of each pool;
                  •   a description of the petrophysical data and analytical procedures to be used;
                  •   a description of the reservoir data for each pool;
                  •   estimates of reserves for each pool, and for each individual fault block or subdivision if the
                      reservoir has been subdivided into sub-units for production purposes;
                  •   a description of the proposed reservoir exploitation scheme. Where hydrocarbons have been
                      identified in a portion of the development area for which development is not proposed, a
                      discussion of the reasons for not proceeding should be included;
                  •   an overview of past drilling activities and the proposed drilling program and typical
                      completion designs for the development wells. The Applicant is not required to submit
                      detailed equipment designs and operating procedures as these will be examined and
                      approved through the Drilling Program Authorization (DPA) process and, in the case of
                      individual well designs, through the Authority to Drill a Well (ADW) process;
                  •   a description of the design philosophy for the production and export systems. This should
                      consider their construction, transportation, installation and operation phases and should be
                      divided into environmental, functional and geotechnical categories;
                  •   a description of the production and export systems options considered and of the system
                      selected for the Development Application, supported by a discussion of the technical, cost,
                      schedule, operational, safety, functional and environmental factors leading to the selection of
                      the proposed system;
                  •   an overview of the construction and installation of the production and export systems
                      describing the approach to follow for quality assurance and quality control during the design,
                      fabrication, construction and installation phases;
                  •   a description of the production and maintenance operations associated with the project;
                  •   a description and discussion of the Applicant’s preliminary safety analysis of the production
                      installation (s. 43, Newfoundland Offshore Petroleum Installations Regulations);
                  •   a description of the efforts made to facilitate decommissioning and abandonment of the
                      installation at the end of its production life;
                  •   documentation of past expenditures and an estimate of future development and operating
                      costs in sufficient detail to permit comprehensive financial and economic analysis;
                  •   a discussion of the data which make up the basis of the Benefits Plan, and of the
                      Environmental Impact Statement and the Socio-Economic Impact Statement, if these
                      documents were required;
                  •   a provision of sufficient information to permit a comprehensive public review of the
                      Development Plan; and
                  •   a summary of all information used in preparing the plan (ss. 4.1 to 4.14 of the
                      “Development Application Guidelines”).

              Applicant’s should consult Chapter 4 of the Board’s “Development Application Guidelines:
              Newfoundland Offshore Area” to ensure that they have submitted all necessary components.




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 10 – Development Application


               Part II of Development Plan
               The second part of the Development Plan should include all technical or other information and
               proposals, as may be prescribed or necessary for a comprehensive review and evaluation of the
               proposed development. Part II requires companies to provide reservoir information. Such information
               is held in confidence by the Board and is not publicly available. Applicants should also submit copies
               of any studies, reports, proposals, analyses, evaluations, etc. that have been used in preparing Part I
               of the document and in the consideration of alternatives. See section 4.15 of the “Development
               Application Guidelines” for a full description of the requirements for Part II of the Development
               Plan.


10-B           Canada-Newfoundland Benefits Plan
               For development and production activities, a more comprehensive Benefits Plan is required than for
               exploration activities. The benefits concerns associated with development and subsequently,
               production activities are to be addressed in the Benefits Plan submitted in the Development
               Application, as set out in Chapter 5 of the Board’s “Development Application Guidelines:
               Newfoundland Offshore Area.”

               The Applicant should maintain ongoing consultation with the Board, and any other government
               departments or agencies that the Board considers to be appropriate, during the preparation of the
               Benefits Plan. The Board also requires that the Applicant provide effective monitoring and reporting
               of procurement decisions and reporting of expenditure and employment levels to ensure that the
               requirements of the Benefits Plan are being adhered to throughout each stage of the project. The
               general requirements associated with the preparation of development Benefits Plans are outlined in
               section 1-B of this Guide.


10-C           Development Application Summary
               The purpose of the Development Application Summary is to provide non-specialist readers with a
               sufficiently comprehensive overview of the Development Application documents. It should be written
               in such a way as to enable these readers to reach an informed opinion about the proposed
               development. The Development Application Summary will be distributed widely to the public.


10-D           Safety Plan
               The Board may require the Applicant to submit a Safety Plan with the Development Application.
               Whether or not a Safety Plan is submitted at this point, one must be submitted and approved before a
               Production Operations Authorization will be issued by the Board. The Safety Plan is intended to
               offer a discussion of safety matters associated with the subjects discussed in the Development Plan
               and the Environmental Impact Statement/Environmental Protection Plan. The requirements of a
               Development Application Safety Plan are set out in Chapter 8 of the Board’s “Development
               Application Guidelines: Newfoundland Offshore Area.” The general requirements of a Safety Plan
               are set out in section 1-C of this Guide.




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                                                                                     10 – Development Application


10-E           Environmental Impact Statement/Environmental Protection Plan
               Pursuant to paragraph 59(f) of the Canadian Environmental Assessment Act (CEAA), the Governor
               in Council has made the Law List Regulations20 prescribing provisions of Acts of Parliament and
               regulations made pursuant to any such Act that confer powers, duties or functions on federal
               authorities or on the Governor in Council, the exercise of which requires a federal environmental
               assessment. One of the Law List Triggers most likely to apply to oil and gas activities in the
               Newfoundland and Labrador Offshore is:
                    •   Canada-Newfoundland Offshore Atlantic Accord Implementation Act – paragraph 138(1)(b)
                        – activity authorization; or paragraph 139(4)(a) – development plan approval.

               Depending on the nature of the project, the Board will be a Responsible Authority under the CEAA
               (see Chapter 15 of the guide for more details), and requirements of the Board for an Environmental
               Impact Statement/Environmental Protection Plan (EIS/EPP) will be integrated as part of the
               CEAA environmental assessment requirements.

               The purpose of the EIS is to describe the baseline environment and all environmental effects that are
               likely to arise as a result of the project. It should focus on the more significant environmental effects
               that may arise from the project, and should discuss both desirable and adverse effects. These
               requirements will be combined with those of the CEAA process (see Chapter 15).

               As part of the Development Application, the EIS/EPP should provide:
                    •   a concise project description including illustrations of major project facilities and maps
                        indicating the areas potentially affected by the project;
                    •   a discussion of the environmental implications of the main alternatives considered;
                    •   a discussion of the environmental implications of any associated projects that may be affected
                        by the development, including onshore infrastructure, trans-shipment and storage facilities;
                    •   a concise baseline description of the existing physical and biological environs of the areas
                        potentially affected by the project, including special consideration of: the geological
                        environment, the atmospheric environment, the oceanic environment, sea ice and icebergs,
                        the shoreline environment and the biological environment;
                    •   a systematic description of the interactions between the various project phases and the
                        physical, biological and geological environments in the project area. This section should also
                        discuss the possibility of major oil and chemical spills and the potential environmental effects
                        of these occurrences;
                    •   a discussion of the equipment and review procedures to be used as a means of preventing or
                        reducing the possible harmful effects of the project on the environment. This should include
                        discussions of: contingency planning and countermeasures, environmental effects monitoring,
                        the physical environmental observation program and forecasting programs; and
                    •   any residual effects that are predicted to remain after all mitigated measures have been
                        incorporated.

               The requirements of a Development Application EIS are set out in Chapter 6 of the Board’s
               “Development Application Guidelines: Newfoundland Offshore Area.”



               20
                Law List Regulations, as am. July 28, 1999, November 4, 1999, SOR/99-330 and SOR/99-438 as am.
               SOR/2003-281 and SOR/2003-351.


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 10 – Development Application


10-F           Socio-Economic Impact Statement
               The Board may request a Socio-Economic Impact Statement (SEIS) from a Applicant in cases
               “where a public review is conducted in relation to any potential development of a pool or field”
               (s. 44(2)(c) C-NAAIA). The SEIS is intended to present the Applicant’s findings about the
               anticipated positive and negative effects of the proposed project on the economic and social fabric of
               the communities and regions that are either directly or indirectly affected by it.

               The SEIS should provide:
                   •    a discussion of the main project alternatives, with a particular focus on the proposed
                        alternative. It should include a comparative analysis of the differences in the predicted socio-
                        economic effects associated with each of the alternatives;
                   •    a discussion of the analytical scope of the SEIS, taking account of: demography; public
                        services and infrastructure, housing, municipal government, social services and facilities, the
                        fishery, land and resource use and socio-cultural issues;
                   •    a discussion of the geographic extent of the project effects, both at the community level and,
                        where applicable, at the provincial and national levels;
                   •    a qualitative and, where appropriate, a quantitative baseline description of the subject area.
                        Where necessary, the Applicant must supplement existing information bases with primary
                        research;
                   •    a qualitative and, where appropriate, a quantitative assessment of the direct and indirect
                        effects of the project on the subject area; and
                   •    an identification of plans to minimize the negative and optimize the positive effects of the
                        project for the subject area.

               The requirements of a Development Application SEIS are set out in Chapter 7 of the Board’s
               “Development Application Guidelines: Newfoundland Offshore Area.”


10-G           Proof of Financial Responsibility
               The Applicant must comply with the requirements and conditions of acceptance set out in the “Proof
               of Financial Responsibility for a Work Authorization” form, section 5.5 of the Board’s “Guidelines
               Respecting Financial Responsibility Requirements For Work or Activity in the Newfoundland and
               Nova Scotia Offshore Areas,” and section 10 of the Newfoundland Offshore Area Petroleum
               Production and Conservation Regulations.

               Typically, financial responsibility requirements will be dealt with under specific Work Authorization
               applications, rather than under the Development Application. Nonetheless, the Board may refuse to
               approve the Applicant’s Development Plan until certain financial responsibility requirements have
               been satisfied. The general procedures associated with submitting Proof of Financial Responsibility
               are outlined in section 1-F.


10-H           Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the
               Development Application or to authorize standards in lieu of any required regulation.




 10-10                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                        11 – Development Program Authorization



              11.0 DEVELOPMENT PROGRAM AUTHORIZATION

              Chapter 11 describes the steps followed in the issuance of a Development Program Authorization,
              for the Newfoundland and Labrador Offshore Area. Chart 11 illustrates these procedures.

              After a Development Plan has been approved by the Board, pursuant to the procedure set out in
              Chapter 10, Operators may commence with the development of the project. Any number of
              development activities may require Work Authorizations from the Board for the offshore construction,
              installation, and commissioning of production platforms. Each development project is likely to present
              a relatively unique situation.

              Every development project progresses through installation, commissioning and certification steps, all
              of which normally precede the commencement of development drilling and production operations.
              Because the various “systems” of a production installation (i.e. power generation, drilling, fire and gas
              detection, etc.) are typically commissioned separately, however, it is possible for drilling operations to
              commence, subject to certain conditions, while commissioning of the production systems is still under
              way.21

              Where some part of the construction process takes place in the Newfoundland and Labrador
              Offshore Area, a Work Authorization will be required for construction activities. Under any other
              circumstance, the first formal Work Authorization issued by the Board would be for installation and
              commissioning, once the platform is moved to the production site.

              The processes relating to the issuance of a Development Program Authorization are set out in the
              C-NAAIA and in various CNOPB regulations and guidelines. These include:
                   •   the Newfoundland Offshore Petroleum Installations Regulations;
                   •   the Newfoundland Offshore Area Petroleum Production and Conservation Regulations;
                   •   the Newfoundland Offshore Drilling Regulations;
                   •   the Petroleum Occupational Safety and Health Regulations, November (Draft November
                       1989);
                   •   the “Safety Plan Guidelines;”
                   •   the “Development Application Guidelines;” and
                   •   the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                       the Newfoundland and Nova Scotia Offshore Areas.”

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              aforementioned documents to ensure they have satisfied all of the requirements set out by the
              CNOPB.




              21
                The Board will only issue a development Drilling Program Authorization when it concludes that drilling
              activities may be carried out in a safe and environmentally responsible manner.



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11 – Development Program Authorization




11-2                                     Newfoundland and Labrador Offshore Guide – January 2004
                                                                       11 – Development Program Authorization




11-1           General Meeting Between the Operator and Regulatory Agencies
               Before an application for a Work Authorization is submitted to the Board, a meeting must be held
               between the Operator(s) and all involved regulatory agencies. A list of agencies that are likely to be
               involved in such a meeting is set out in section 11-7, below.

               This general meeting provides an opportunity to discuss the general project and specific benefits
               matters, including the employment profile, and to go over the objectives that the Operator hopes to
               achieve. It also gives agencies an overview of what is to come, and provides them with an opportunity
               to begin their respective processes. This meeting should be held in the early stages of the process to
               provide time to work through any possible issues and to determine whether any of the proposed
               activities are likely to trigger additional regulatory requirements.


11-2           Application for a Development Program Authorization is Submitted
               to the Board
               The Applicant initiates the process by applying for a Work Authorization from the Board.
               Application forms are available from the CNOPB office in St. John’s.

               In addition, there are a number of other requirements that must be satisfied before an Authorization
               will be issued. These include the obtaining and/or submitting of the following requirements, some of
               which may have already been obtained/submitted as part of an earlier application:
                   •    an Operating Licence (11-A);
                   •    an Approved Canada-Newfoundland Benefits Plan (11-B);
                   •    an Approved Safety Plan (11-C);
                   •    an Approved Environmental Impact Statement/Environmental Protection Plan (11-D);
                   •    an Approved Development Plan (11-E);
                   •    Proof of Financial Responsibility (11-F);
                   •    a Program Description (11-G);
                   •    a Declaration of Fitness (11-H); and
                   •    additional requirements as specified by the Board (11-I).

               These requirements are described in sections 11-A through 11-I, at the end of this chapter.


11-3           Application is Reviewed by the Board in Consultation with Other
               Agencies
               The Board conducts an internal review of the various components of the application. The Board may,
               and usually does, seek input from other federal or provincial agencies on selected issues, particularly
               those relating to safety and environmental protection. The agencies that are typically consulted by the
               Board in reviewing an application are listed in section 1-2.




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 11 – Development Program Authorization


11-4 to 11-6 Board Decision Regarding the Issuance of a Development Program
             Authorization
               Once the Board has reviewed the Work Authorization application and consulted with other agencies,
               as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply. If the Board approves
               the application, and any additional requirements have been satisfied, the Development Program
               Authorization will be issued and the program may proceed.


11-7           Possible Licences, Permits and Authorizations From Other
               Regulatory Agencies
               In addition to the requirements of the Board, and depending on the nature of the project, Applicants
               may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
               may include:
                   •    a CEAA Determination (Chapter 15);
                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a CEPA, 1999 Disposal at Sea Permit (Chapter 17);
                   •    a Transport Canada Vessel Certification (Chapter 19);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);
                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Work Authorization is
               issued in advance of one or more required federal approvals, the work itself may not begin until all of
               these approvals have been obtained.


11-8           Continuing Obligations
               After the Development Program Authorization is issued, the Operator will be subject to continuing
               obligations. Operators are advised to pay particular attention to section 62 of the Newfoundland
               Offshore Petroleum Installations Regulations for information about the procedural requirements
               associated with the construction and installation of production platforms. In addition to complying
               with all procedural requirements, Operators are expected to satisfy a variety of approval, reporting
               and submission requirements. These consist of a) ongoing requirements, which must be satisfied at
               regular intervals throughout the program, and b) operational requirements, which must only be
               satisfied under specific circumstances.




 11-4                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                       11 – Development Program Authorization


              Ongoing Approval, Reporting and Submission Requirements
              Ongoing reporting requirements for a Development Program Authorization may include:
              Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                  •   submitting of a daily operating record (ss. 72(1) and 73(1)).

              Operational Approval, Reporting and Submission Requirements
              Operational requirements for a Development Program Authorization may include:
              Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                  •   obtaining an approval of an amendment to an approved Development Plan (s. 6);
                  •   submitting a pool pressure survey program for approval (ss. 13(3) and 13(4));
                  •   where the Operator intends to conduct construction or a related activity simultaneously with
                      the production of petroleum, the Operator shall include procedures in the Safety Plan to
                      ensure the safety of persons on board the production installation and the protection of the
                      environment (s. 28(1)(c));
                  •   obtaining an approval of a personnel training program (s. 62(2)); and
                  •   submitting a report to the CCO or the CSO summarizing, for the month requested, the
                      construction progress and any significant events occurring at the production site or during the
                      construction of the production installation (s. 71).

                  Newfoundland Offshore Petroleum Installations Regulations
                  •   notifying the Board if the Certifying Authority for the installation is changed (s. 10);
                  •   reporting any repair, replacement or modification to the installation (s. 67(1));
                  •   obtaining an approval by both the CSO and the Certifying Authority when any equipment
                      that could affect the strength, stability, integrity, operability or safety of the installation is
                      brought aboard the installation (s. 67(1));
                  •   notifying the CSO and the Certifying Authority if any deterioration of the installation that
                      could impair the safety of the installation or damage the environment is noticed (s. 67(4));
                  •   reporting any situation or event involving any danger or accident to a person or property as
                      soon as practicable (ss. 70(1) and 70(2));
                  •   informing the Chief at least 24 hours before the start of “tow out” of an installation
                      (s. 70(3)(a));
                  •   informing the Chief at least 24 hours before any lift at a production site in excess of 500
                      tonnes (s. 70(3)(b)); and
                  •   informing the Chief at least 24 hours before the up-ending or setting on bottom of an
                      installation (s. 70(3)(c)).

                  Newfoundland Offshore Petroleum Drilling Regulations
                  •   obtaining an approval for the replacement of equipment or alteration of a procedure
                      described in the Development Program Authorization prior to undertaking the replacement
                      or alteration (s. 7(2)); and
                  •   obtaining an approval of the manner used to dispose of all sewage, galley, and other domestic
                      waste material that might contribute to pollution (s. 114(a)).




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 11 – Development Program Authorization


11-A to 11-I Requirements of an Application for a Development Program
             Authorization and/or an Application
               There are a number of additional requirements that are likely to be associated with the seeking of a
               Development Program Authorization. While not all of these requirements need to be satisfied when
               the application is first submitted to the Board, all must be in place before the Authorization will be
               issued. They are described in sections 11-A through 11-I.

               Many of these requirements will have already been satisfied as part of the Applicant’s Development
               Application approval. In these cases, the Board does not require that they be resubmitted.


11-A           Operating Licence
               A Development Program Authorization will only be issued to Applicants who have obtained an
               Operating Licence. If the Applicant already holds a valid Operating Licence, a new one will not
               have to be obtained. The procedure for obtaining an Operating Licence is described in section 1-A of
               this Guide.


11-B           Approved Canada-Newfoundland Benefits Plan
               It is expected that all benefits concerns associated with development activities will have been approved
               in advance through the comprehensive Benefits Plan that was approved as part of the Applicant’s
               Development Application.

               The general requirements of a Benefits Plan associated with a Development Application are outlined
               in section 1-B of this Guide. Operators are advised to maintain an ongoing dialogue with the Board
               in relation to benefits matters throughout this phase of the project. For operations that deviate from
               those outlined in the Development Application, the Board may ask the Operator to demonstrate that
               the Development Program will conform to the logic expressed in the Applicant’s Benefits Plan.


11-C           Approved Safety Plan
               Applicants for a Development Program Authorization are expected to have submitted a Safety Plan
               as part of a Development Application. This plan does not, however, need to be formally approved by
               the Board until a Production Operations Authorization is sought. It is expected that safety concerns
               associated with the development of a petroleum project will have been contemplated in this plan. As
               part of the Safety Plan, the Board must include an Emergency Response Plan (ERP) and an Oil
               Spill Response Plan (OSRP) to cover all development activities that occur in the offshore area.

               Where the Applicant intends to conduct construction or related activities simultaneously with the
               production of petroleum, the Applicant must include procedures to ensure the safety of persons on
               board the installation and the protection of the environment as part of the Safety Plan. (s. 28(1)(c),
               Newfoundland Offshore Petroleum Installations Regulations).

               A general description of the Safety Plan requirements is set out in section 1-C of this Guide.




 11-6                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                      11 – Development Program Authorization


11-D           Approved Environmental Impact Statement/Environmental
               Protection Plan
               Because Development Programs occur after a Development Application has been approved, a new
               EIS/EPP will not typically be required. This is because provisions to protect the environment during
               the program should have already been addressed in the comprehensive environmental assessment that
               the application was subject to as part of the Development Application.

               A description of the requirements for environmental assessment pursuant to the CEAA, can be found
               in Chapter 15. Refer also to Chapter 1, section 1-D, for a general description of CNOPB
               environmental assessment requirements.


11-E           Approved Development Plan
               An approved Development Plan should be in place before a Development Program Authorization is
               made. It is expected that all development activities will have been contemplated ahead of time in the
               Development Plan. The requirements associated with obtaining a Development Plan Approval are
               discussed in Chapter 4 of the Board’s “Development Application Guidelines” and in Chapter 10 of
               this Guide.


11-F           Proof of Financial Responsibility
               The Applicant must provide Proof of Financial Responsibility for any Development Program. The
               financial responsibility requirements associated with development and production works and activities
               are described in section 5.5 of the “Guidelines Respecting Financial Responsibility Requirements
               For Work or Activity in the Newfoundland and Nova Scotia Offshore Areas.”

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization.

               A general description of the general Proof of Responsibility requirements for any Work
               Authorization are outlined in section 1-F of this Guide.


11-G           Program Description
               As described in section 1-G, the Applicant is required to provide a detailed description of the aims
               and objectives of the proposed program and any relevant supporting documentation.


11-H           Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a Development Program
               will be authorized. In practice, the Declaration of Fitness is only submitted to the Board when all
               other requirements, as described in sections 11-A through 11-I, have been fulfilled. The general
               requirements of a Declaration of Fitness are outlined in section 1-H.




 Newfoundland and Labrador Offshore Guide – January 2004                                                         11-7
 11 – Development Program Authorization




11-I           Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




 11-8                                          Newfoundland and Labrador Offshore Guide – January 2004
                                                                     12 – Production Operations Authorization




               12.0 PRODUCTION OPERATIONS AUTHORIZATION

               Chapter 12 describes the steps followed in the issuance of a Production Operations Authorization,
               for the Newfoundland and Labrador Offshore Area. Chart 12 illustrates these procedures.

               Pursuant to subsection 7(1) of the Newfoundland Offshore Production and Conservation Regulations,
               no person shall commence production from a pool or field, other than by means of a formation flow
               test, unless the person has obtained a Production Operations Authorization (POA).

               Until all wells have been completed, a production operation usually goes hand in hand with an
               ongoing drilling operation. This means that multiple Work Authorizations may need to be in place at
               the same time, specifically, a POA, a Drilling Program Authorization (DPA – see Chapter 3)
               and/or a Well Operations Program Authorization (WOPA – see Chapter 13). In cases where more
               than one Work Authorization is required, the requirements for the various Authorizations need only
               be submitted once. However, a formal application through the appropriate forms must be made for
               each of the required Work Authorization approvals.

               The processes relating to the issuance of a Production Operations Authorization are set out in the
               C-NAAIA and in various CNOPB regulations and guidelines. These include:
                   •   the Newfoundland Offshore Area Petroleum Production and Conservation Regulations;
                   •   the Newfoundland Offshore Petroleum Installations Regulations;
                   •   the Newfoundland Offshore Certificate of Fitness Regulations;
                   •   the Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft
                       November 1989);
                   •   the “Safety Plan Guidelines;”
                   •   the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                       the Newfoundland and Nova Scotia Offshore Areas;” and
                   •   the “Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field
                       Evaluations in the Newfoundland and Nova Scotia Offshore Areas.”

               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               aforementioned documents to ensure they have satisfied all of the requirements set out by the
               CNOPB.


12-1           Application for a Production Operations Authorization is Submitted
               to the Board
               The Applicant initiates the process by forwarding signed copies of the “Production Operations
               Authorization Application” form to the Board. These forms are available from the CNOPB office in
               St. John’s.




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12 – Production Operations Authorization




12-2                                       Newfoundland and Labrador Offshore Guide – January 2004
                                                                        12 – Production Operations Authorization


               In addition to the submission of application forms, there are a number of other requirements that must
               be satisfied before an Authorization will be issued. These include the obtaining and/or submitting of:
                   •    an Operating Licence (12-A);
                   •    an Approved Canada-Newfoundland Benefits Plan (12-B);
                   •    an Approved Safety Plan (12-C);
                   •    an Approved Environmental Impact Statement/Environmental Protection Plan (12-D);
                   •    an Approved Development Plan (12-E);
                   •    Certificate(s) of Fitness (12-F);
                   •    a Production Licence (12-G);
                   •    Proof of Financial Responsibility (12-H);
                   •    a Program Description (12-I);
                   •    an Operations Manual (12-J);
                   •    an Approved Data Acquisition Program (12-K);
                   •    Pool, Field (Well) and Production Installation Location Surveys (12-L);
                   •    a Flow (Measurement) System Approval, a Flow Calculation Procedure Approval, a Flow
                        Allocation Procedure Approval, and a Transfer Meter Approval (12-M);
                   •    an Approval to Conduct a Formation Flow Test (12-N);
                   •    a Flaring or Venting of Gas Approval (12-O);
                   •    a Pooling or Unitization Agreement (only if multiple land interests are involved) (12-P);
                   •    a Declaration of Fitness (12-Q);
                   •    ongoing dialogue with the Board (12-R); and
                   •    additional requirements as specified by the Board (12-S).

               These requirements are described in sections 12-A through 12-S, at the end of this chapter.


12-2           Application is Reviewed by the Board (Possible Consultation with
               Other Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. The agencies that are typically
               consulted by the Board in reviewing an application for a Work Authorization are listed in section 1-2.


12-3 to 12-5 Board Decision Regarding the Issuance of a Production Operations
             Authorization
               Once the Board has reviewed the Work Authorization application and consulted with other agencies,
               as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply. If the Board approves
               the application, the Work Authorization will be issued and the program may proceed.

               Pursuant to subsection 8(3) of the Newfoundland Offshore Area Petroleum Production and
               Conservation Regulations, where a Production Operations Authorization has been issued, no
               amendment shall be made to the Production Operations unless it is approved by the Board on
               submission of a revised application in accordance with this section.




 Newfoundland and Labrador Offshore Guide – January 2004                                                           12-3
 12 – Production Operations Authorization


12-6            Possible Licences, Permits and Authorizations From Other
                Regulatory Agencies
                In addition to the requirements of the Board, and depending on the nature of the project, Applicants
                may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
                may include:
                    •    a CEAA Determination (Chapter 15);
                    •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                         Fisheries and Oceans (Chapter 16);
                    •    a CEPA, 1999 Disposal at Sea Permit (Chapter 17);
                    •    a Transport Canada Vessel Certification (Chapter 19);
                    •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                         Licence (Chapter 20);
                    •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                    •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

                The Board may choose to withhold its Authorization until all regulatory requirements of other
                agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
                in advance of one or more required federal approvals, the work itself may not begin until all of these
                approvals have been obtained.


12-7            Continuing Obligations
                After the Authorization is issued, the Operator will be subject to continuing obligations. In addition
                to complying with all procedural requirements, Operators are expected to satisfy a variety of approval,
                reporting and submission requirements. These consist of a) ongoing requirements, which must be
                satisfied at regular intervals throughout the program, and b) operational requirements, which must only
                be satisfied under specific circumstances.

                Ongoing Approval, Reporting and Submission Requirements
                Ongoing reporting requirements for a Production Operations Authorization may include:
                Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                    •    carrying out a pool pressure survey 12 months after production commences and at scheduled
                         times, in accordance with a pool pressure survey schedule (s. 13(2));
                    •    submitting a daily platform operations report;
                    •    submitting a daily operating record to the CCO and the CSO, if requested (s. 72(1));
                    •    submitting a daily production record to the CCO and the CSO, if requested (s. 73(1));
                    •    submitting a monthly production report to the CCO (s. 74(2));
                    •    submitting an annual production report to the CCO (s. 77(1)); and
                    •    submitting an annual environmental report to the CCO (s. 77(1)).

                Newfoundland Offshore Petroleum Drilling Regulations
                    •    submitting a daily geological report (s. 153(b)).




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                                                                    12 – Production Operations Authorization


              Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November 1989)
                  •   submitting an annual report setting out the number of accidents, disabling injuries, minor
                      injuries and other occurrences that affected the Operator’s employees over the course of the
                      12-month period ending December 31st of the preceding year (s. 15).


              Operational Approval, Reporting and Submission Requirements
              Operational requirements for a Production Operations Authorization may include:
              Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                  •   obtaining an approval of an amendment to an approved Development Plan (s. 6);
                  •   submitting a survey to the CCO showing the location of the production installation for that
                      pool or field and of all wells (s.7(3));
                  •   informing the CCO at least 48 hours before carrying out a production test on a development
                      well, if requested (s. 12(5));
                  •   submitting the results of all production tests to the CCO (s. 12(6));
                  •   submitting a pool pressure survey program for approval (ss. 13(3) and 13(4));
                  •   providing the CCO with a compositional analysis of representative fluid from the pool and a
                      description of the general physical properties of the gas and liquid components of the fluid
                      (s. 15(6));
                  •   applying for a Well Operations Program Authorization (WOPA) and, possibly, an
                      Approval for a Well Operation (AWO) (see Chapter 13 of this Guide) (ss. 17 and 18);
                  •   obtaining an approval from the CCO to abandon a zone well (s. 18(6));
                  •   where the Operator intends to conduct construction or a related activity simultaneously with
                      the production of petroleum, the Operator shall include procedures in the Safety Plan to
                      ensure the safety of persons on board the production installation and the protection of the
                      environment (s. 28(1)(c));
                  •   submitting infill drilling studies and enhance recovery studies to the CCO (s. 29(3));
                  •   obtaining an approval for an imbalance of volumes or a different rate of production, where
                      ultimate recovery from the pool will not be reduced (s. 30(2));
                  •   obtaining an approval of the volumes or rate of production from the CCO (s. 30(3),);
                  •   obtaining an approval to engage in comingled production (s. 31(2));
                  •   obtaining a flaring or venting of gas approval (s. 32(4));
                  •   obtaining an approval to burn or dispose of oil, where the burning does not constitute waste
                      or an undue safety hazard or damage to the natural environment (s. 33(4));
                  •   submitting a copy of a transfer meter calibration report to the CCO and details of the
                      transfer meter’s specifications and operating procedures (s. 37(3));
                  •   submitting of a record of the flow through each group production meter or test production
                      meter to the CCO if requested (s. 42);
                  •   testing of the accuracy of a meter used to measure the production of petroleum and
                      submitting the results of the test to the CCO (s. 44);
                  •   obtaining approval from the CCO for the underground injection of water produced from a
                      well (s. 49(3));
                  •   submitting an updated inventory of equipment described in the Safety Plan and the
                      Environmental Protection Plan to the Chiefs within 45 days after the completion of any
                      significant modifications or major repairs to any major components of the equipment
                      (s. 51(7));



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12 – Production Operations Authorization


                  •   submitting drawings and other documentation referred to in the Safety Plan and the
                      Environmental Protection Plan to the Chiefs, if requested (s. 51(10));
                  •   reporting every failure or unsuccessful test of the safety system of a production installation or
                      any component of the safety system to the CSO (s. 53(4));
                  •   reporting the results of any programs instituted pursuant to paragraph 54(d) to the CSO, if
                      requested (s. 54(e));
                  •   if the standby vessel exceeds the distance or time set out in subsection 55(1) without the
                      consent of the installation manager, both the installation manager and the master of the
                      standby vessel shall log the incident and submit a written report to the Board within 48 hours
                      stating the reason why the distance or time was exceeded. (s. 55(2));
                  •   obtaining an approval from the CCO or the CSO for the resumption of an operation that
                      has been suspended (s. 60(4));
                  •   providing the Chief with a personnel training program and summary of the qualifications and
                      training of personnel employed at the production site for approval (ss. 62(2) and 63(2));
                  •   providing a report to the CCO if the Operator proposes that another Operator operate the
                      production installation (s. 70(1));
                  •   providing documentation to the Board that will enable the Board to determine if the new
                      operator is able to meet the commitments and responsibilities of the previous operator under
                      the Act and these Regulations (s. 70(2));
                  •   submitting a report to the CCO or the CSO summarizing, for the month requested, the
                      construction progress and any significant events occurring at the production site or during the
                      construction of the production installation, if requested (s. 71);
                  •   submitting three copies of the results, data, analyses and schematics obtained from any
                      measurement, core, fluid sample, segregation test or well operation to the CCO within 60
                      days of the date that the activity is carried out (ss. 75(1) and 75(2));
                  •   submitting interim evaluations of any pilot scheme that the operator has conducted at a pool
                      or field to the CCO and a report after the completion of the pilot scheme (ss. 76(1) and
                      76(2)); and
                  •   where the performance of a well in a pool differs significantly from the predictions in the
                      annual production reports for the pool, submitting to the CCO performance evaluations of
                      the well in the pool at intervals set by the CCO (s. 77(4)).

               Newfoundland Offshore Petroleum Installations Regulations
                  •   notifying the Board if the Certifying Authority for the installation is changed (s. 10);
                  •   reporting any repair, replacement or modification to the installation (s. 67(1));
                  •   obtaining an approval by both the CSO and the Certifying Authority when any equipment
                      that could affect the strength, stability, integrity, operability or safety of the installation is
                      brought aboard the installation (s. 67(1));
                  •   notifying the CSO and the Certifying Authority if any deterioration of the installation that
                      could impair the safety of the installation or damage the environment is noticed (s. 67(4));
                  •   reporting any situation or event involving any danger or accident to a person or property
                      (ss. 70(1) and 70(2));
                  •   informing the Chief at least 24 hours before any lift at a production site in excess of 500
                      tonnes (s. 70(3)(b));
                  •   informing the Chief at least 24 hours before the up-ending or setting on bottom of an
                      installation (s. 70(3)(c));




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                    •    obtaining an approval for the replacement of equipment or alteration of a procedure
                         described in the Development Program Authorization prior to undertaking the replacement
                         or alteration (s. 7(2));
                    •    obtaining an approval of the manner used to dispose of all sewage, galley, and other domestic
                         waste material that might contribute to pollution (s. 114(a));
                    •    submitting monthly summaries of accident statistics to the CSO (s. 145(1)); and
                    •    submitting weekly summaries of all significant events and hazardous occurrences to the CSO
                         (s. 153(1)).


12-A to 12-S Requirements of an Application for a Production Operations
             Authorization and/or an Application
                There are a number of additional requirements that are likely to be associated with the seeking of a
                Production Operations Authorization. While not all of these requirements need to be satisfied when
                the application is first submitted to the Board, all must be in place before the Authorization will be
                issued. They are described in sections 12-A through 12-S.

                Many of these requirements will have already been satisfied as part of the Applicant’s Development
                Application. In these cases, the Board does not require that they be resubmitted.


       12-A     Operating Licence
                A Production Operations Authorization will only be issued to Applicants who have obtained an
                Operating Licence. If the Applicant already holds a valid Operating Licence, a new one will not
                have to be obtained. The procedure for obtaining an Operating Licence is described in section 1-A of
                this Guide.


       12-B     Approved Canada-Newfoundland Benefits Plan
                It is expected that all benefits concerns associated with production activities will have been approved
                in advance through the comprehensive Benefits Plan that was approved as part of the Applicant’s
                Development Application.

                The general requirements of a Benefits Plan associated with a development and production are
                outlined in section 1-B of this Guide. Operators are advised to maintain an ongoing dialogue with the
                Board in relation to benefits matters throughout this phase of the project. For operations that deviate
                from those outlined in the Development Application, the Board may ask the Operator to demonstrate
                that the POA will conform to the logic expressed in the Applicant’s Benefits Plan.


       12-C     Approved Safety Plan
                Although a comprehensive Safety Plan that covers all development and production activities is usually
                submitted along with the Applicant’s Development Application, formal approval of the plan is not
                required until a POA is sought. The requirements associated with preparing a Safety Plan and
                obtaining approval of a Safety Plan are set out in section 51 of the Newfoundland Offshore Area



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               Petroleum Production and Conservation Regulations and described in detail in the “Safety Plan
               Guidelines.”

               As part of the Safety Plan, the Board must approve an Emergency Response Plan (ERP), an Oil
               Spill Response Plan (OSRP) and a Personnel Training Program. A description of the Board’s
               procedures for assessing these plans and coordinating activities with other agencies in relation to
               emergency measures can be found in Appendix D.

               Where the Applicant intends to conduct construction or related activities simultaneously with the
               production of petroleum, the Applicant must include procedures to ensure the safety of persons on
               board the installation and the protection of the environment as part of the Safety Plan (s. 28(1)(c),
               Newfoundland Offshore Petroleum Installations Regulations).

               No Production Operation requiring personnel with special skills will be permitted until:
                   •    the Operator has submitted to the Chief Safety Officer a description of the training that the
                        Operator proposes to require of the persons employed for that operation;
                   •    this training has been approved by the Chief Safety Officer under subsection 62(2) of the
                        Newfoundland Offshore Area Petroleum Production and Conservation Regulations; and
                   •    the Operator has ensured that the employees have successfully completed approved training.

               The Chief Safety Officer shall approve the training program as part of the Safety Plan if the training
               is sufficient to enable the Production Operation to be conducted in a safe manner. Although a
               personnel training program is a condition precedent to the issuing of a POA, it is also an ongoing
               requirement. It is expected that further training programs will be employed as needed.

               A general description of the Safety Plan requirements is set out in section 1-C of this Guide.


       12-D    Approved Environmental Impact Statement/Environmental
               Protection Plan
               Although a conceptual EPP that covers all development and production activities is usually submitted
               along with the Applicant’s Development Application, formal approval of the EPP is not required
               until a POA is sought (s. 51(5)) Newfoundland Offshore Area Petroleum Production and
               Conservation Regulations).

               Because Production Operations occur after a Development Application has been approved, a new
               environmental assessment will not typically be required.

               A description of the general requirements for environmental assessment and be found in Chapter 15.


       12-E Approved Development Plan
               An approved Development Plan should be in place before the application for a Production
               Operations Authorization. It is expected that all development activities will have been contemplated
               ahead of time in the Development Plan. The requirements associated with obtaining a Development
               Plan Approval are discussed in Chapter 4 of the Board’s “Development Application Guidelines”
               and described in Chapter 10 of this Guide.


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     12-F     Certificate(s) of Fitness
              The Applicant must hold a Certificate of Fitness for any drilling rig, production platform or other
              installation that is to be used as part of a Production Operation. If Certificates of Fitness are already
              in place for all installations that are employed in the program, new ones are not required.

              In addition, every holder of a Work Authorization for which a prescribed installation is used must
              appoint an Installation Manager to be in command of the installation. New managers need not be
              appointed if managers are already in place for all installations used in the program.

              The requirements associated with obtaining a Certificate of Fitness and appointing an Installations
              Manager are summarized in section 1-E of this Guide.


     12-G     Production Licence
              A POA will not be issued before the applicant has obtained a Production Licence. The procedure
              for obtaining a Production Licence is described in Chapter 9.


      12-H Proof of Financial Responsibility
              The Applicant must provide Proof of Financial Responsibility to cover production activities. The
              financial responsibility requirements associated with development and production works and activities
              are described in section 5.5 of the “Guidelines Respecting Financial Responsibility Requirements
              For Work or Activity in the Newfoundland and Nova Scotia Offshore Areas.”

              The limits of absolute liability for spill and debris related claims resulting from Production
              Operations are prescribed by the Canada-Newfoundland Offshore Oil and Gas Spills and Debris
              Liability Regulations.

              In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
              to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
              specific Work Authorization.

              The general procedures associated with submitting Proof of Financial Responsibility for any Work
              Authorization are outlined in section 1-F of this Guide.


     12-I     Program Description
              As described in section 1-G, the Applicant is generally required to provide a detailed description of
              the aims and objectives of the proposed program and any relevant supporting documentation.




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     12-J      Operations Manual
               Pursuant to subsection 63(1) of the Newfoundland Offshore Petroleum Installations Regulations, for
               each installation used in a Production Operation, Operators are required to submit an Operations
               Manual to the Board. Operators are advised to consult the regulations for a complete list of the
               requirements that are to be satisfied by this manual.


     12-K      Approved Data Acquisition Program
               The Newfoundland Offshore Area Petroleum Production and Conservation Regulations provide the
               framework for evaluation programs pertaining to reservoir characterization and effective depletion
               monitoring. In accordance with these regulations, Applicant’s must submit a Data Acquisition
               Program to the Board for approval before a POA will be issued. When an Applicant’s Data
               Acquisition Program receives Board approval, the Applicant normally also satisfies a number of other
               regulatory approval and submission requirements, including the need for:
                    •   a Development Well Coring Program Approval (s. 11);
                    •   a Testing Program Approval (s. 12(2));
                    •   a Pool Pressure Survey Program Approval (s. 13(4));22
                    •   the submission of a Cased Hole Log (s. 14(2)); and
                    •   the submission of the results of fluid sampling and analysis (s. 15(6)).

               Detailed information on the preparation of these requirements is provided in section 2-2 of the “Joint
               Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field Evaluations in the
               Newfoundland and Nova Scotia Offshore Areas.” Further information can be found in Part II
               (sections 11 through 15) of the Newfoundland Offshore Area Petroleum Production and Conservation
               Regulations.


     12-L      Pool, Field (Well) and Production Installation Location Surveys
               Pursuant to paragraph 74(1)(a) of the Newfoundland Offshore Petroleum Drilling Regulations, every
               Operator shall ensure that a legal survey is used to confirm the location of any development well.

               Furthermore, pursuant to subsection 7(3) of the Newfoundland Offshore Area Petroleum Production
               and Conservation Regulations, before an Operator commences production of petroleum from a pool
               or field, the Operator must submit a survey to the CCO showing the location of the production
               installation for that pool or field.


        12-M A Flow (Measurement) System Approval, A Flow Calculation
             Procedure Approval, A Flow Allocation Approval, and a Transfer
             Meter Approval
               Pursuant to section 36 of the Newfoundland Offshore Area Petroleum Production and Conservation
               Regulations, an Operator is required to allocate group production of oil and gas from wells in a pool

               22
                  In practice, the Pool Pressure Survey Program Approval may be issued after the Work Authorization is
               issued.


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                                                                      12 – Production Operations Authorization


              or on a pro rata basis to the wells in accordance with a flow system, flow calculation procedure and an
              allocation procedure that have been approved by the Board. Most often, when seeking these
              approvals, applicants combine all three elements into one document.

              The Board’s Chief Conservation Officer shall approve a flow system, flow calculation and allocation
              procedure if the system and procedures will permit reasonably accurate determination of the
              production from individual wells and the transfer of fluids from the production installation.

              After the approvals are issued, the Operator is expected to maintain ongoing consultations with the
              Board in relation to the flow system. Contact with the Board should be established as early as possible
              and should be maintained throughout the production phase of the project.

              Applicants must also forward details of the specifications and operating procedures of any transfer
              meters used in any Production Operation to the Board for approval. Requests for transfer meter
              approvals are often submitted along with the request for a Flow System Approval. Pursuant to
              subsection 37(2) of the Newfoundland Offshore Area Petroleum Production and Conservation
              Regulations, the Board’s Chief Conservation Officer will approve a transfer meter as part of the flow
              system, if the meter and the operating procedures will permit the determination of volumes to an
              accuracy required for transfer purposes. For the purposes of verifying the accuracy of the meter, the
              Operator is expected to submit a copy of any meter calibration report to the Board, if such a report is
              requested by the Chief Conservation Officer.

              The Board is presently developing a guideline to inform prospective Operators of the measurement
              standards associated with producing petroleum in the Newfoundland and Labrador Offshore Area.

              After these approvals are obtained, the Operator continues to be subject to ongoing procedural and
              reporting requirements during production.


     12-N     Approval to Conduct a Formation Flow Test
              Operators must conduct a formation flow test before a POA will be issued. Pursuant to subsection
              171(2) of the Newfoundland Offshore Petroleum Drilling Regulations, Board approval must be
              sought before such a test will be permitted.


     12-O     A Flaring or Venting of Gas Approval
              A Flaring or Venting of Gas Approval must be obtained from the Board before a POA will be
              issued. Pursuant to subsection 32(4) of the Newfoundland Offshore Area Production and
              Conservation Regulations, the Board’s Chief Safety Officer and the Chief Conservation Officer may
              approve the flaring or venting of gas during a Production Operation at a rate and volume and for the
              period set out in the approval where the flaring or venting does not constitute waste or an undue safety
              hazard.




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     12-P      A Pooling or Unitization Agreement (only if multiple land interests
               are involved)
               Pursuant to subsection 171(1) of the C-NAAIA, no person shall produce any petroleum within a
               spacing unit in which there are two or more leases or two or more separately owned working interests
               unless a pooling agreement has been entered into in accordance with section 167 of the C-NAAIA or
               in accordance with a pooling order made under section 168 of the C-NAAIA.

               A “pooling agreement” is an agreement to pool the interests of owners in a spacing unit and to
               provide for the operation or the drilling and operation of a well thereon.

               Under some circumstances, a unitization agreement may also be required before a POA is issued.
               Pursuant to subsection 172(1) of the C-NAAIA, any one or more working interest owners in a pool
               or part thereof exceeding in area a spacing unit, together with the royalty owners, may enter into a
               unit agreement and operate their interests pursuant to the terms of the unit agreement or any
               amendment thereto if a copy of the agreement and any amendment has been filed with the CCO.

               For more information on pooling and unitization agreements, see Division II of the C-NAAIA.


     12-Q      Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a POA will be issued. In
               practice, the Declaration of Fitness is only submitted to the Board when all other requirements, as
               described in sections 12-A through 12-S, have been fulfilled. The general requirements of a
               Declaration of Fitness are outlined in section 1-H.


     12-R      Ongoing Dialogue with the Board
               Operators are urged to establish contact with the Board as early as possible in the process. A
               complete plan is not a necessary condition precedent to the commencement of regular meetings with
               the Board. Monthly or bi-monthly meetings should be held throughout the POA process and should
               be continued after production has commenced.


     12-S      Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




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                                                                   13 – Well Operations Program Authorization



              13.0 WELL OPERATIONS PROGRAM AUTHORIZATION

              Chapter 13 describes the steps followed in the issuance of a Well Operations Program
              Authorization, for the Newfoundland and Labrador Offshore Area. Chart 13 illustrates these
              procedures.

              As outlined in Chapter 4, an Approval to Drill a Well covers all activities up to, and including, the
              initial completion of the well. The Board authorizes any subsequent well operations and interventions
              through a Well Operation Program Authorization (WOPA). Pursuant to subsection 17(1) of the
              Newfoundland Offshore Area Petroleum Production and Conservation Regulations, no person shall
              conduct a well operation in respect of a development well in a pool or field unless the well operation is
              conducted in accordance with the WOPA. All operations and interventions on completed wells,
              including wireline, slickline and coiled tubing are authorized under the WOPA.

              WOPAs will only be issued for activities that are contemplated in the Applicant’s Development
              Plan. Activities that stray significantly from the Development Plan may be classified as new
              developments. Under these circumstances, the Board could require the Applicant to submit a new
              Development Application before an application for a Work Authorization would be considered.

              A WOPA is not required for a well operation that is undertaken in a situation of emergency. Under
              these circumstances, it is expected that the Operator will do whatever is necessary to bring the well
              under control, and will report any such activities to the Board shortly thereafter.

              The processes relating to the issuance of a WOPA are set out in the C-NAAIA and in:
                  •    the Newfoundland Offshore Area Petroleum Production and Conservation Regulations;
                  •    the Newfoundland Offshore Area Petroleum Diving Regulations;
                  •    the Newfoundland Offshore Petroleum Installations Regulations;
                  •    the Newfoundland Offshore Certificate of Fitness Regulations;
                  •    the Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft
                       November 1989);
                  •    the “Safety Plan Guidelines;” and
                  •    the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                       the Newfoundland and Nova Scotia Offshore Areas.”

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              aforementioned documents to ensure they have satisfied all of the requirements set out by the
              CNOPB.




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13 – Well Operations Program Authorization




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                                                                   13 – Well Operations Program Authorization


13-1           Application for a Well Operation Program Authorization is Submitted
               to the Board
               The Applicant initiates the process by forwarding three signed copies of the “Well Operations
               Program Authorization Application” form to the Board. These forms are available from the
               CNOPB office in St. John’s. If an Approval for a Well Operation (AWO) is required, the
               Applicant must also forward three copies of the application for an AWO to the Board, at least 21
               days prior to the anticipated start of the operation (see 13-5 below).

               Information submitted by an Operator in a Drilling Program Authorization application may, where
               relevant, also be set out in the documentation submitted to obtain a Well Operations Program
               Authorization (s. 17(2) Newfoundland Offshore Area Petroleum Production and Conservation
               Regulations).

               Each application must also be accompanied by the following items:
                   •   a description of operating procedures, general arrangement drawings and specification of the
                       installation from which the well operation is to be performed;
                   •   a copy of a valid Certificate of Fitness for the installation for which the operation is being
                       performed (see section 13-5);
                   •   the location and configuration of all wells, both existing and planned, for which the
                       application is made;
                   •   a schematic and the relevant engineering data on a typical development well including the
                       wellhead, Christmas tree, casing and tubing designs, cementing program, downhole
                       equipment and production control system;
                   •   a description of the completion fluids to be used;
                   •   on pressure control facilities, tools and equipment that may be used in performing the well
                       operation;
                   •   a description of the operating procedures to be used for conducting all well operations that
                       may be foreseen, including emergency pressure control procedures (see sections 13-J and
                       13-C); and
                   •   a description of the training, specialized skills and the relevant experience of the personnel
                       who will be engaged in well operations, in accordance with sections 62 and 63 of the
                       Newfoundland Offshore Area Petroleum Production and Conservation Regulations.

               In addition to the submission of these documents, there are a number of other requirements that must
               be satisfied before an Authorization will be issued. These include the obtaining and/or submitting of:
                   •   an Operating Licence (13-A);
                   •   an Approved Canada-Newfoundland Benefits Plan (13-B);
                   •   an Approved Safety Plan (13-C)
                   •   an Approved Environmental Protection Plan (13-D);
                   •   Certificate(s) of Fitness (13-E);
                   •   an Approved Development Plan (13-F);
                   •   Proof of Financial Responsibility (13-G);
                   •   an Operations Manual (13-H);
                   •   a Program Description (13-I);
                   •   a Declaration of Fitness (13-J); and
                   •   additional Requirements as specified by the Board (13-K).



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 13 – Well Operations Program Authorization


               These requirements are described in sections 13-A through 13-K, at the end of this chapter.


13-2           Application Reviewed by the Board (Possible Consultation with Other
               Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies is generally sought as part of this process. The agencies that are typically
               consulted by the Board in reviewing an application for a WOPA are listed in section 1-2.


13-3 & 13-4 Board Decision Regarding the Issuance of a Well Operations
            Program Authorization
               Once the Board has reviewed the WOPA application and consulted with other agencies, as
               appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply. If the Board approves
               the application, and any additional requirements have been satisfied, the WOPA will be issued and
               the program may proceed.

               If issued, the Authorization is valid for the period, not exceeding three years, specified in the
               Authorization. It is subject to the continued validity and force of the Certificate of Fitness and is
               conditional on the Operator using the equipment and following the specified procedures, as described
               in subsection 18(3) of the Newfoundland Offshore Area Petroleum Production and Conservation
               Regulations.


13-5           Application for an Approval for a Well Operation is Submitted to the
               Board
               Pursuant to subsection 18(2) of the of the Newfoundland Offshore Area Petroleum Production and
               Conservation Regulations, no person shall conduct a well operation in respect of a development well
               in a pool or field unless that person has obtained an Approval for a Well Operation (AWO).

               Operations requiring an AWO include:
                   •    rig intervention to repair or maintain well integrity (where Christmas tree is removed);
                   •    rig intervention to re-complete the well to another production or injection zone, or where a
                        zone with the well is suspended or abandoned;
                   •    slickline, wireline or coiled tubing intervention where the completion interval is altered, or a
                        zone with the well is suspended or abandoned;
                   •    Christmas tree replacement that includes the master valve(s);
                   •    any operation which alters the completion interval, for example re-completing a well to
                        another production or injection zone or squeezing perforations;
                   •    any operation which has the potential to adversely affect recovery; or
                   •    the suspension or abandonment of a zone or well.




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              An AWO is not required for:
                  •   slickline, wireline or coiled tubing intervention to perform:
                      −    pressure, temperature or spinner surveys,
                      −    cased hole logs,
                      −    re-perforation of existing completion intervals,
                      −    installation of pressure and temperature gauge hangars,
                      −    the setting of flow control devices, such as blanking plugs,
                      −    drift runs,
                      −    removal of scale or fill from within a well,
                      −    servicing or lock out of tubing retrievable subsurface safety valves,
                      −    replacement of wireline retrievable subsurface safety valve,
                      −    gas lift servicing and valve replacement,
                      −    subsurface fluid sampling, or
                      −    installation of memory pressure and temperature gauges;
                  •   chemical treatments, including acid stimulation, hydraulic fracturing and scale inhibition;
                  •   nitrogen gas lift through coiled tubing;
                  •   introduction of chemical or radioactive tracers into injection wells;
                  •   replacement of wing, swab or kill valves on Christmas trees; or
                  •   maintenance of Christmas trees.

              If an Approval for a Well Operation is required, the Applicant must forward three copies of the
              application for an AWO to the Board, at least 21 days prior to the anticipated start of the operation.
              Applicants must also submit:
                  •   the name and type of well;
                  •   the name of the contractor and a description of the equipment to be used to conduct the well
                      operation; and
                  •   a technical description of the downhole equipment to be used to conduct the well operation,
                      including:
                      −    the objective of the well operation,
                      −    a schematic description of the downhole equipment and tublars,
                      −    a schematic of, and relevant engineering data on, the current Christmas tree and
                           production control system,
                      −    the bottomhole shut-in pressure,
                      −    a description and the properties of the workover or completion fluid, and
                      −    the procedures proposed for the well operation.

              Additional requirements exist if an Operator wishes to suspend or abandon a completion interval in a
              development well or to abandon a zone or well. These requirements are described in subsections
              18(5) and 18(6) of the Newfoundland Offshore Area Petroleum Production and Conservation
              Regulations.




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13-6 to 13-8 Board Decision Regarding the Issuance of an Approval for a Well
             Operation
               If the Board has reviewed the application and is satisfied that the operation will be conducted in a safe
               manner and will not cause waste, it will make a decision to issue the Approval for a Well Operation,
               and allow the operation to proceed. If the Board rejects the application, the Applicant may revise it
               and reapply.


13-9           Possible Licences, Permits, Approvals and Authorizations From
               Other Regulatory Agencies
               In addition to the requirements of the Board, and depending on the nature of the project, Applicants
               may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
               may include:
                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a Transport Canada Domestic Vessel Inspection and Certification (Chapter 19);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);
                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all of these
               approvals have been obtained.


13-10          Continuing Obligations
               After the Authorization is issued, the Operator will be subject to continuing obligations. In addition
               to complying with all procedural requirements, Operators are expected to satisfy a variety of approval,
               reporting and submission requirements. These consist of a) ongoing requirements, which must be
               satisfied at regular intervals throughout the program, and b) operational requirements, which must only
               be satisfied under specific circumstances.


               Ongoing Approval, Reporting and Submission Requirements
               Ongoing reporting requirements for Well Operations Programs may include:
               Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                   •    the submitting of a well operations report to the CCO within 30 days after the completion of
                        a well operation (s. 20(1));
                   •    the submitting of an annual report of all of the wireline or coiled tubing operations conducted
                        in the previous year (s. 20(2)); and
                   •    the submitting of a daily operating record (ss. 72(1) and 73(1)).




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              Operational Approval, Reporting and Submission Requirements
              Operational requirements for a Well Operations Program may include:
              Newfoundland Offshore Area Petroleum Production and Conservation Regulations
                  •   obtaining an approval to conduct a testing program (s. 12(2));
                  •   testing the well to determine the effects of the well operation on the deliverability, productivity
                      or injectivity of the well and submitting the results of the test to the CCO, in cases where a
                      development well is subjected to a well operation that could change the deliverability,
                      productivity or injectivity of the well (ss. 12(3) and 12(6)). The Operator is expected to
                      inform the CCO at least 48 hours before testing the well;
                  •   running a cased hole log, and submitting a copy of the log to the CCO (s. 14 (2));
                  •   running an open hole log, and submitting a copy of the log to the CCO;
                  •   submitting a compositional analysis of representative fluid from the pool and a description of
                      the general physical properties of the gas and liquid components of the fluid. (s. 15);
                  •   informing the CCO and the CSO if a well operation cannot be completed in accordance
                      with an AWO (s. 18(9)(b));
                  •   obtaining the consent of the CCO and the CSO in cases where action must be taken to
                      avoid losing control of a well (s. 18(10));
                  •   submitting information describing the well operation as soon as possible where well
                      operations are pursued (ss. 18(10) and 18(11));
                  •   informing a Conservation Officer of the time the Operator intends to conduct the well
                      operation for which an AWO has been issued (s. 18(12));
                  •   obtaining an approval for comingled production (s. 31(2));
                  •   obtaining an approval for the resumption of a suspended operation (s. 60(4)); and
                  •   submitting the results, data, analyses and schematics obtained from any measurement, core,
                      fluid sample, segregation test or well operation (s. 75(1)).

              Newfoundland Offshore Petroleum Installations Regulations
                  •   notifying the Board if the Certifying Authority for the installation is changed (s. 10);
                  •   reporting any repair, replacement or modification to the installation (s. 67(1));
                  •   obtaining an approval by both the CSO and the Certifying Authority when any equipment
                      that could affect the strength, stability, integrity, operability or safety of the installation is
                      brought aboard the installation. (s. 67(1));
                  •   notification the CSO and the Certifying Authority if any deterioration of the installation that
                      could impair the safety of the installation or damage the environment is noticed (s. 67(4));
                      and
                  •   reporting any situation or event involving any danger or accident to a person or property,
                      including loss of life, a missing person or property, an imminent threat to safety of personnel
                      or the public, fire explosion, loss of well control, hydrocarbon or toxic fluid spills, or
                      significant damage to a pipeline, equipment or an installation. A full written report of these
                      events should be submitted as soon as practicable (ss. 70(1) and 70(2)).




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               Newfoundland Offshore Petroleum Drilling Regulations
                   •   obtaining an approval for the replacement of equipment or alteration of a procedure
                       described in the Development Program Authorization prior to undertaking the replacement
                       or alteration (s. 7(2));
                   •   obtaining an approval to install additional casing in a well (s. 52(2));
                   •   obtaining an approval of the manner for disposing of waste material, drilling fluid, or drill
                       cuttings (s. 112);
                   •   obtaining an approval for the use of chemical countermeasures to combat oil spills
                       (s. 113(b));
                   •   obtaining an approval of the manner used to dispose of all sewage, galley, and other domestic
                       waste material that might contribute to pollution (s. 114(a));
                   •   obtaining an approval for the commencement of a welding operation at a drill site
                       (s. 135(1));
                   •   reporting of any significant situations or significant events (s. 145(2));
                   •   submitting weekly summaries of all significant situations or significant events (s. 153(1)(a));
                   •   submitting two copies of all wireline logs run by the Operator and, if available, wireline logs
                       in digit form (s. 154(2)(a) and (b));
                   •   submitting all wireline log data in respect of the well before it is terminated (s. 154(2)(c));
                   •   recording the details of the manner in which the well has been terminated and submitting the
                       record within 21 days after the rig release date in respect of the well (s. 158(1));
                   •   submitting a sketch illustrating the condition of the well after termination (s. 158(2));
                   •   submitting, by telex or telecopier, a copy of any press release concerning any discovery,
                       blowout, or other significant event that occurs at the well (s. 159);
                   •   submitting a testing program prior to conducting a formation flow test (s. 171(1)); and
                   •   obtaining an approval to conduct a formation flow test (s. 171(2)).


13-A to 13-J Requirements of an Application for a Well Operations Program
             Authorization and/or an Application for an Approval for a Well
             Operation
               There are a number of additional requirements that are associated with the seeking of a WOPA
               and/or an AWO. While not all of these requirements need to be satisfied when the application is first
               submitted to the Board, all must be in place before the Authorization will be issued. They are
               described in sections 13-A through 13-J.
               Many of these requirements will have already been satisfied as part of the Applicant’s Development
               Application, or as part of a previous Work Authorization application. In these cases, the Board does
               not require that they be resubmitted.


13-A           Operating Licence
               A Well Operations Program Authorization will only be issued to Applicants who have obtained an
               Operating Licence. If the Applicant already holds a valid Operating Licence, a new one will not
               have to be obtained. The procedure for obtaining an Operating Licence is described in section 1-A of
               this Guide.




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13-B           Approved Canada-Newfoundland Benefits Plan
               It is expected that all benefits concerns associated with Well Operations Programs will have been
               approved in advance through the comprehensive Benefits Plan that was approved as part of the
               Applicant’s Development Application.

               The general requirements of a Benefits Plan associated with a Development Application are outlined
               in section 1-B of this Guide. Operators are advised to maintain an ongoing dialogue with the Board
               in relation to benefits matters throughout this phase of the project. For operations that deviate from
               those outlined in the Development Application, the Board may ask the Operator to demonstrate that
               the development program will conform to the logic expressed in the Applicant’s Benefits Plan.


13-C           Approved Safety Plan
               Because a WOPA is typically sought after a Production Operations Authorization has been issued,
               it is likely that an approved Safety Plan will already be in place at the time of application. It is
               expected that safety concerns associated with any Well Operations will have been contemplated in this
               plan. The requirements associated with preparing a Safety Plan and obtaining an approval for a
               Safety Plan are presented in section 51 of the Newfoundland Offshore Area Production and
               Conservation Regulations and in the “Safety Plan Guidelines.” As part of the Safety Plan, the Board
               must approve an Alert/Emergency Response Plan (ERP) and an Oil Spill Response Plan (OSRP).

               Where the Applicant intends to conduct a well operation simultaneously with the production of
               petroleum, the Applicant must include procedures to ensure the safety of persons on board the
               installation and the protection of the environment as part of the Safety Plan (s. 28(1)(b),
               Newfoundland Offshore Petroleum Installations Regulations).

               A general description of the Safety Plan requirements is set out in section 1-C of this Guide.


13-D           Approved Environmental Protection Plan
               Because a WOPA is typically sought after a Production Operations Authorization has been issued,
               a new EPP will not typically be required. This is because an approved EPP will already be in place
               at the time of application. It is expected that environmental concerns associated with any Well
               Operations will have been contemplated in this plan.

               A description of the general requirements for Environmental Protection Plans is provided in
               section 1-D of this Guide.


13-E           Certificate(s) of Fitness
               The Applicant must hold a Certificate of Fitness for any drilling rig, production platform, or other
               installation that is used as part of a WOPA. If Certificates of Fitness are already in place for all
               installations that are employed in the program, new ones are not required.




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               In addition, every holder of a Work Authorization for which a prescribed installation is used must
               appoint an Installation Manager to be in command of the installation. New managers need not be
               appointed if managers are already in place for all installations used in the program.

               The requirements associated with obtaining a Certificate of Fitness and appointing an Installations
               Manager are summarized in section 1-E of this Guide.


13-F           Development Plan
               An approved Development Plan should be in place before an application is made for a WOPA. It is
               expected that all Well Operations will have been contemplated ahead of time in the Development
               Plan. The requirements associated with obtaining a Development Plan Approval are discussed in
               Chapter 10 of this document and in the Board’s “Development Application Guidelines,” Chapter 4.


13-G           Proof of Financial Responsibility
               The Applicant must provide Proof of Financial Responsibility to cover Well Operations Programs.
               The financial responsibility requirements associated with development and production works and
               activities are described in section 5.5 of the “Guidelines Respecting Financial Responsibility
               Requirements For Work or Activity in the Newfoundland and Nova Scotia Offshore Areas.”

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization.

               The general procedures associated with submitting Proof of Financial Responsibility for any Work
               Authorization are outlined in section 1-F of this Guide.


13-H           Operations Manual
               Pursuant to subsection 63(1) of the Newfoundland Offshore Petroleum Installations Regulations, for
               each installation used in a well operation, Operators are required to submit an Operations Manual to
               the Board for approval. Operators are advised to consult the regulations for a complete list of the
               requirements that are to be satisfied by this manual. Where applicable, it must contain:
                   •   limitations on the operation of the installation and its equipment;
                   •   information as to environmental conditions at the site where the installation will be installed
                       and the effect of those conditions on the installation;
                   •   for a fixed platform, the characteristics of the platform foundation, bottom penetration and
                       the maximum permitted amount of scour or other changing seabed conditions;
                   •   for a mobile platform that is supported by the seabed, information concerning the different
                       seabed conditions acceptable for the installation;
                   •   for a floating mobile platform, information concerning stability, including all data and
                       instructions necessary to determine whether any intended configuration of, or change to, the
                       loading or ballasting will satisfy the stability requirement for the platform;
                   •   information concerning permissible deck loads, variable load limits and preloading;
                   •   details of any colour coding system used on the installation for the safety of personnel;



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                 •   information on corrosion protection systems used and any requirements for the safety and
                     maintenance of the systems;
                 •   details of openings and means of closure in watertight compartments;
                 •   drawings that show:
                     −    the general arrangement of the deck structure, accommodation areas, helideck and
                          equipment contained on the topside facilities,
                     −    for a fixed steel platform, the jacket, piling, risers and conductors,
                     −    for a gravity-base platform and a fill-retention platform, the lower concrete or steel
                          platform including any skirt arrangements or piling, the deck structure connection to the
                          lower structure, the risers and the conductors,
                     −    for a self-elevating mobile platform, the main and supporting platforms, the equipment
                          for the elevating and lowering of the deck structure and any arrangements for towing,
                     −    for a column-stabilized mobile platform, the main and support structure, the method for
                          maintaining the station and arrangement for towing,
                     −    for a surface mobile platform and any similar-shaped platform, the hull structure and the
                          positioning equipment,
                     −    for a fill platform, the erosion protection and a cross-section of the platform including the
                          locations of the conductors,
                     −    the locations of escape routes, fixed fire extinguishing systems and life-saving appliances,
                     −    the fire divisions and the location of associated equipment, such as fire dampers,
                     −    the location of the hazardous areas on the installation, and
                     −    for a floating mobile platform, the ballast and bilge systems and all openings and means
                          of closure that could affect the stability of the platform;
                 •   the operating and maintenance requirements for all the lifesaving appliances on the
                     installation;
                 •   the maximum helicopter weight and wheel centres, and maximum size of the helicopter for
                     which the helicopter deck on the installation has been designed, including the extent of the
                     obstacle-free approach zone for the helicopter;
                 •   special arrangements or facilities for the inspection and maintenance of the installation, any
                     equipment or plant, and any crude oil storage facilities on or in the installation;
                 •   special precautions or instructions to be followed when repairs or alterations to the
                     installation are to be carried out;
                 •   any special operational or emergency requirements covering essential features of the
                     installation, including the shutdown systems;
                 •   a description of any equipment for elevating and lowering the installation and of any special
                     types of joints, including details of their purpose, proper operation and maintenance;
                 •   for a fixed platform, details of the air gap or freeboard;
                 •   for a mobile platform, the means of ensuring that the air gap requirements determined in
                     accordance with subsection 50(1) are met;
                 •   the environmental loads the anchors can sustain to keep the installation moored in place;
                 •   for a floating platform, procedures for dealing with the excursion of the platform because of
                     the failure of any anchor line, as determined by analysis;
                 •   where there is a thruster-assisted mooring system, procedures to control operations when
                     thruster power is lost;
                 •   where there is a dynamic positioning system, a description of the capability of that system in
                     all operational and survival conditions within stated tolerances, when any single source of
                     thrust has failed and full power is being supplied for all foreseeable operations and
                     emergency services;
                 •   details of the number of persons to be accommodated during normal operations;


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                   •   brief particulars of all the equipment on the installation, including flow sheets and
                       instructions for the installation, operation and maintenance of the equipment;
                   •   the procedure for preparing, and the description and format for periodic reports concerning
                       the integrity of the installation; and
                   •   a procedure for notifying the Chief of any situation or event described in section 67.


13-I           Program Description
               As described in section 1-G of this Guide, the Applicant is required to provide a detailed description
               of the aims and objectives of the proposed program and any relevant supporting documentation.


13-J           Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a Well Operations Program
               will be authorized. In practice, the Declaration of Fitness is only submitted to the Board when all
               other requirements, as described here in sections 13-A through 13-K, have been fulfilled. The
               general requirements of a Declaration of Fitness are outlined in section 1-H.


13-K           Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization application or to authorize standards in lieu of any required regulation.




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                                                                    14 – Decommissioning Work Authorizations



              14.0 DECOMMISSIONING WORK AUTHORIZATIONS

              Chapter 14 describes the steps that may be involved in obtaining a Decommissioning Authorization
              for the Newfoundland and Labrador Offshore Area. Because the requirements of each Authorization
              may differ significantly from project to project, this chapter is not accompanied by a chart.

              Decommissioning is the final formal phase in the life cycle of an offshore oil and gas development.
              Like any other activity in the offshore area, decommissioning requires the Board to issue a Work
              Authorization for the same objective as any other such Authorization. It is important to note that the
              Board has not issued many Decommissioning Authorizations and that the process for doing so is still
              being developed. The Board’s legislation, regulations and guidelines address the requirements of the
              decommissioning process in a general manner. Individual projects will involve specific requirements
              that may vary from one project to the next.

              For the purposes of this Guide, the term “decommissioning” denotes the general process of converting
              oil and gas production operations to a condition that can be left indefinitely without further attention.
              This includes the decommissioning of an installation, the abandonment of a field, and the
              abandonment of individual wells. The well abandonment process may be undertaken repeatedly
              throughout the life cycle of an offshore oil and gas development. Required procedures associated with
              well abandonment are outlined in Chapter 4 of this Guide (Approval to Drill a Well). This chapter
              focuses on the general process for decommissioning production operations.

              In general, the mode of decommissioning is addressed in general terms in the Operator’s
              Development Plan, and is sanctioned, with appropriate changes and conditions imposed by the
              Board, during the Development Plan Approval process. This process is described in Chapter 10 of
              this Guide. It is expected that activities associated with decommissioning are to be carried out in
              compliance with the Development Plan.

              The processes relating to the issuance of a Decommissioning Work Authorization are set out in the
              C-NAAIA and in various Board regulations and guidelines. These include:
                  •    the Newfoundland Offshore Area Petroleum Production and Conservation Regulations;
                  •    the “Development Application Guidelines;”
                  •    the Newfoundland Offshore Petroleum Installations Regulations;
                  •    the Newfoundland Offshore Certificate of Fitness Regulations; and
                  •    the “Guidelines Respecting Financial Responsibility Requirements for Work or Activity in
                       the Newfoundland and Nova Scotia Offshore Areas.”

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              aforementioned documents to ensure they have satisfied all of the requirements set out by the
              CNOPB.




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 14 – Decommissioning Work Authorizations


14-1           Application for a Decommissioning Work Authorization is Submitted
               to the Board
               The Applicant applies for a Decommissioning Authorization by forwarding copies of the required
               application forms to the Board. In addition to the submission of the application forms, there are a
               number of other requirements that must be satisfied before an Authorization will be issued. Since this
               chapter addresses the decommissioning of production operations, which were previously authorized by
               the Board under the Production Operations Authorization (see Chapter 12), almost all of these
               requirements will already have been satisfied under the POA Authorization.

               If no updates are needed, the Board will not require that the previously-submitted POA requirements
               be re-submitted. These requirements are described in sections 12-A through 12-S at the end of
               Chapter 12 and include:
                   •   an Operating Licence (12-A);
                   •   an Approved Canada-Newfoundland Benefits Plan (12-B);
                   •   an Approved Safety Plan (12-C);
                   •   an Approved Environmental Impact Statement/Environmental Protection Plan (12-D);
                   •   an Approved Development Plan (12-E);
                   •   Certificate(s) of Fitness (12-F);
                   •   a Production Licence (12-G);
                   •   Proof of Financial Responsibility (12-H);
                   •   a Program Description (12-I);
                   •   an Operations Manual (12-J);
                   •   an Approved Data Acquisition Program (12-K);
                   •   Pool, Field (Well) and Production Installation Location Surveys (12-L);
                   •   a Flow (Measurement) System Approval, a Flow Calculation Procedure Approval, a Flow
                       Allocation Procedure Approval, and a Transfer Meter Approval (12-M);
                   •   an Approval to Conduct a Formation Flow Test (12-N);
                   •   a Flaring or Venting of Gas Approval (12-O);
                   •   a Pooling or Unitization Agreement (only if multiple land interests are involved) (12-P);
                   •   a Declaration of Fitness (12-Q);
                   •   ongoing dialogue with the Board (12-R); and
                   •   additional requirements as specified by the Board (12-S).

               In addition, there are a number of requirements which must be submitted and/or obtained by the
               Operator to accompany the Decommissioning Authorization application. These components are
               described in sections 14-A through 14-F at the end of this chapter and include:
                   •   plans to Implement the Development Plan (14-A);
                   •   Certificate(s) of Fitness (14-B);
                   •   Proof of Financial Responsibility (14-C);
                   •   a Program Description (14-D);
                   •   Declaration of Fitness (14-E); and
                   •   additional requirements as specified by the Board (14-F).




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14-2           Application is Reviewed by the Board (Consultation with Other
               Agencies)
               The Board conducts an internal review of the various components of the application. Input from other
               government agencies may be sought as part of this process. The agencies that are typically consulted
               by the Board in reviewing an application for a Work Authorization are listed in section 1-2.


14-3           Board Decision Regarding the Granting of a Decommissioning Work
               Authorization
               Once the Board has reviewed the Work Authorization application and consulted with other agencies,
               as appropriate, it will make a decision to either issue or refuse to issue the Authorization. If the Board
               rejects the application, the Applicant may revise the application and reapply. If the Board approves
               the application, and any additional requirements have been satisfied, the Work Authorization will be
               issued and the program may proceed.


14-4           Possible Licences, Permits, Approvals and Authorizations From
               Other Regulatory Agencies

               In addition to the requirements of the Board, and depending on the nature of the project, Applicants
               may be required to obtain licences, permits, approvals or authorizations from federal agencies. These
               may include:
                   •    a CEAA Determination (Chapter 15);
                   •    a Fisheries Act Authorization from the Habitat Management staff of the Department of
                        Fisheries and Oceans (Chapter 16);
                   •    a CEPA, 1999 Disposal at Sea Permit (Chapter 17);
                   •    a Transport Canada Domestic Vessel Inspection and Certification (Chapter 19);
                   •    a Transport Canada Foreign Vessel Certification (Chapter 20);
                   •    a Canada Border Services Agency and Canadian Transportation Agency Coasting Trade
                        Licence (Chapter 20);
                   •    a Human Resources Development Canada Employment Confirmation (Chapter 21); and
                   •    a Citizenship and Immigration Canada Work Permit (Chapter 21).

               A CEAA determination will be made if either a Fisheries Act Authorization or a CEPA, 1999
               Disposal at Sea Permit are needed (see Chapter 15). A Fisheries Act Authorization will be needed if
               the decommissioning activities could result in the harmful alteration, disruption or destruction of fish
               habitat (see Chapter 16). A CEPA, 1999 Disposal at Sea Permit is needed if dismantling the
               various offshore exploration and production structures results in a need to dispose of materials at sea
               (see Chapter 17).

               The Board may choose to withhold its Authorization until all regulatory requirements of other
               agencies have been satisfied, but this is not always the case. Even if a Board Authorization is issued
               in advance of one or more required federal approvals, the work itself may not begin until all of these
               approvals have been obtained.




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14-A to 14-E Requirements of an Application for a Decommissioning Work
             Authorization
               There are a number of additional requirements that are associated with the seeking of a
               Decommissioning Program Authorization. While not all of these requirements need to be satisfied
               when the application is first submitted to the Board, all must be in place before the Authorization will
               be issued.

               These requirements are described in sections 14-A through 14-E.


14-A           Plans to Implement the Development Plan
               Pursuant to section 50 of the Newfoundland Offshore Area Petroleum Production and Conservation
               Regulations, no person shall decommission a production installation at a pool or field other than in
               accordance with the approved Development Plan or a requirement of an Authorization issued
               pursuant to paragraph 138(1)(b) of the C-NAAIA.

               As mentioned in the description of the Development Plan in section 10-A of this Guide, each
               Development Plan must include provisions outlining a Decommissioning Plan. In particular, section
               4.13 of the “Development Application Guidelines” sets out the contents of the “Decommissioning
               and Abandonment” part of the Development Plan. They are as follows:
                    •   description of the provisions included in the design to facilitate decommissioning and
                        abandonment of the installation at the end of its production life;
                    •   an overview plan of the decommissioning and abandonment program and a discussion of the
                        feasibility of the proposed procedures should be provided; and
                    •   a description of the measures that would have to be taken to leave the site in a fishable and
                        navigable state should be included.

               Examples of the requirements imposed on the Board with respect to the decommissioning aspect of
               the Development Plan are found in the 1990 “Decision 90.01, Updating Decision 86.01
               Application of Approval Hibernia Development Plan Update.”23 At section 4.3.7.7 of Decision
               90.01, the Board required that the following conditions be met with regard to the decommissioning of
               the development/production operations:
                    •   design all subsea facilities such that, upon termination of production, they will be capable of
                        being covered or removed so that the area is returned to a fishable condition;
                    •   design the GBS so that it could be removed if the Authorities at that time so require;
                    •   remove all abandoned subsea well equipment above the seafloor and to design the GBS
                        platform for eventual refloating;
                    •   ensure that the Certifying Authority reviews the suitability of the detailed design of the GBS
                        for eventual refloating; and
                    •   before starting any work or activity authorized by the Board, Evidence of Financial
                        Responsibility must be furnished.



               23
                 CNOPB, “Decision 90.01, Updating Decision 86.01 Application of Approval Hibernia Development
               Plan Update Decision 90.01,” 1990, online at CNOPB website: http://www.cnopb.nfnet.com (date
               accessed: April 2, 2001).


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               Any deviation from the Decommissioning Plan as set out in the approved Development Plan must be
               approved by the Board before it is carried out.

               It is important to note that the decommissioning process is still under development. More regulations
               may come into force between the time an Operator obtains a Development Plan approval and the
               time that decommissioning activities commence. In the event that a regulation comes into force during
               that period, the Board has typically expected that the requirements set out by the Development Plan
               approval be governed by the regulations in force at the time decommissioning activities are
               undertaken.24


14-B           Certificate(s) of Fitness
               The Applicant will already hold Certificates of Fitness for any drilling rig, production platform, or
               other installation that is used for work associated with the POA, undertaking decommissioning
               activities. However, new Certificates are required for every phase of the decommissioning work as the
               dismantling of installations will modify the fitness of the installations.

               In addition, every holder of a Work Authorization for which a prescribed installation is used must
               appoint an Installation Manager to be in command of the installation. New managers need not be
               appointed if managers are already in place for all installations used in the program.

               The requirements associated with obtaining a Certificate of Fitness and appointing an Installations
               Manager are summarized in section 1-E of this Guide.


14-C           Proof of Financial Responsibility
               The Applicant must provide Proof of Financial Responsibility to cover the decommissioning of a
               production installation. The financial responsibility requirements associated with decommissioning
               activities are described in section 5.6 of the “Guidelines Respecting Financial Responsibility
               Requirements For Work or Activity in the Newfoundland and Nova Scotia Offshore Areas.”

               In providing evidence of financial responsibility, the Operator, on behalf of the participating interest
               holders and parties, must include the following:
                    •   the projected cost associated with the abandonment of the pool or field and the
                        decommissioning of the production installation;
                    •   the manner and form in which the Operator will ensure, on behalf of the interest owner, that
                        the abandonment/decommissioning costs will be paid;
                    •   the manner, form and associated costs in which the decommissioned production installation
                        will be maintained (in the event that entire removal is not required);
                    •   the manner and form in which any residual liability will be dealt with by the Operator and
                        interest owner, in the event any subsequent claims arise after such abandonment/

               24
                 For example, in the CNOPB’s “Decision 90.01,” the Board confirmed that: “The Applicant states in
               Section 6.6 of the Update that “When the reserves of the Hibernia Field have been recovered,
               decommissioning and site restoration will be carried out in accordance with applicable regulations in effect at
               that time” (section 4.3.7.7).



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                       decommissioning occurs, with respect to damages attributable to the Operator’s work or
                       activity; and
                   •   such other information as the Board may consider necessary (s. 5.6 “Guidelines respecting
                       Financial Responsibility Requirements for Work or Activity in the Newfoundland and Nova
                       Scotia Offshore Areas.”)

               In addition to the Proof of Financial Responsibility requirements, the Board requires the Applicant
               to pay a cost recovery fee. This fee may be covered under a general program fee, or it may be tied to a
               specific Work Authorization.

               The general procedures associated with submitting Proof of Financial Responsibility are outlined in
               section 1-F.


14-D           Program Description
               As described in section 1-G, the Applicant is required to provide a detailed description of the aims
               and objectives of the proposed program and any relevant supporting documentation.


14-E           Declaration of Fitness
               The Applicant must submit a Declaration of Fitness to the Board before a Decommissioning
               Program will be authorized. In practice, the Declaration of Fitness is only submitted to the Board
               when all other requirements, as described in sections 14-A through 14-D, have been fulfilled. The
               general requirements of a Declaration of Fitness are outlined in section 1-H.


14-F           Additional Requirements as Specified by the Board
               The Board retains the authority to request that additional components be included with the Work
               Authorization.




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                                                                     15 – CEAA Environmental Assessment Process



               15.0 CEAA ENVIRONMENTAL ASSESSMENT PROCESS

               Chapter 15 describes the steps followed in a CEAA Environmental Assessment (EA). Chart 15
               illustrates this process.

               A CEAA Environmental Assessment (EA) is a process under the Canadian Environmental Assessment Act
               (CEAA or the Act) whereby “federal authorities” ensure that an assessment of the environmental effects of a
               “project,” as defined by the Act, is carried out before a course of action to support the project in whole or in
               part, is undertaken. The federal environmental assessment process is administered by the Canadian
               Environmental Assessment Agency (the Agency or CEAA). For a description of the Agency’s mandate,
               please consult Appendix A of this Guide.

               Commencing in late 1999, the Act underwent a five-year review pursuant to subsection 72(1), and its
               provisions, including those setting out the EA process, have changed significantly with the proclamation of
               Bill C-9. In addition the Law List Regulations have been amended to include certain legislated decisions of
               the CNOPB and the CNSOPB.25 Thus those selected legislated decisions of the two Boards would trigger
               the federal EA process. The process described in this section reflects the current state of the legislation, with
               all changes in effect.

               This chapter is only a summary of the various requirements. Applicants are advised to consult the Act
               and its regulations, or the Agency, to ensure they have satisfied all necessary requirements.


15-1           Project Description Provided to CEAA or to a Federal Authority
               The Proponent must provide a description of the activity in order to determine whether it is a
               “project” pursuant to the provisions of the CEAA, as well as to determine federal authorities’
               responsibilities with respect to the environmental assessment. In the case of Development
               Applications, the description submitted to the CNOPB as set out in Chapter 10 of this Guide, is
               typically provided to the Agency for this determination. Project Descriptions are also needed in
               relation to other project types such as exploratory drilling projects and seismic surveys.


15-2           Is the Activity a “Project” Pursuant to the Canadian Environmental
               Assessment Act?
               Only those proposed activities which fall within the Act’s definition of a “project” will be subject to
               the CEAA environmental assessment process. An activity is a “project” if it falls within one of the
               following two categories:
                      •   an undertaking in relation to a physical work? or,
                      •   a physical activity , not in relation to a physical work, that is described in the Inclusion List
                          Regulations.




               25
                    The CNOPB was designated a federal authority in 1997. The CNSOPB was designated in January 2001.


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15 – CEAA Environmental Assessment Process




15-2                                    Newfoundland and Labrador Offshore Guide – January 2004
                                                                         15 – CEAA Environmental Assessment Process


15-2-1         Is it an Undertaking in Relation to a Physical Work?
               The first part of the “project” definition includes any proposed construction, operation, modification,
               decommissioning, abandonment or other undertaking in relation to that physical work (s. 2(1), “project,”
               paragraph (a)). A physical work, although not defined in the Act, can generally be thought of as any man-
               made thing having a fixed location.

               If the proposal is an undertaking in relation to a physical work, it is defined as a project. If it is not, it may still
               be defined as a project if it falls under the second category (15-2-2 below).


15-2-2         Is the Activity Found on the Inclusion List Regulations?
               The second category is defined as, “any proposed physical activity not relating to a physical work that is
               prescribed, or is within a class of physical activities that is prescribed pursuant to regulations made under
               paragraph 59(b) of the Act (s. 2(1), “project,” s. (b)). Such physical activities are prescribed by the
               Inclusion List Regulations.26 The following oil and gas projects are found in the Inclusion List
               Regulations:
                      •   Item 15 - physical activities relating to the abandonment of the operation of a pipeline that
                          requires leave under paragraph 74(1)(d) of the National Energy Board Act;
                      •   Item 17 - excavation using power-operated equipment or explosives at a distance of less than
                          30 m from a pipeline, where the excavation requires leave under subsection 112(1) of the
                          National Energy Board Act;
                      •   Item 18 - physical activities relating to the exploration for, or the production of, oil or gas that
                          requires an Authorization under paragraph 5(1)(b) of the Canada Oil and Gas Operations
                          Act;
                      •   Item 19 - physical activities relating to the approval of a Development Plan under subsection
                          5.1(4) of the Canada Oil and Gas Operations Act; and
                      •   Item 19.1 - physical activities that require an authorization referred to in paragraph
                          142(1)(b) of the Canada-Nova Scotia Offshore Petroleum Resources Accord
                          Implementation Act and relate to (a) a marine or freshwater seismic survey during which the
                          air pressure measured at a distance of one metre from the seismic energy source is greater
                          than 275.79 kPa (40 psi) or (b) a drilling program or (c) the production of oil or gas.

               If the activity is found on the Inclusion List Regulations, it is defined as a “project.” If the activity is
               not an undertaking in relation to a physical work and is not found on the Inclusion List Regulations, it
               is not a “project” as defined by the Act.


15-3           Act Does Not Apply
               If the activity is not a “project,” as defined by the Act, the Act does not apply and there is no
               requirement to undertake a federal environmental assessment.




               26
                    As am. November 4, 1999 SOR/99-436 and July 28, 2003..


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15-4           The Activity Is a “Project”
               If the activity is a “project,” as defined by the Act, the Act may apply, depending on the answers to
               the following three questions:
                      •   Is the project in the Exclusion List Regulations or otherwise excluded?
                      •   Is there a federal authority?
                      •   Is the federal EA process “triggered” by a section 5 Function?

               These questions are discussed individually in sections 15-5, 15-6 and 15-7, respectively.


15-5           Is the Project in the Exclusion List Regulations or Otherwise
               Excluded?
               Pursuant to paragraph 7(1)(a) of the Act, there are a number of projects, including some relating to
               offshore oil and gas, that are explicitly excluded by the Governor in Council from the federal EA
               process. These are typically projects that do not require an environmental assessment under the Act
               because they are understood to have insignificant effects on the environment. These projects are listed
               in the Exclusion List Regulations27 as follows:
                      •   the proposed relocation of a section of oil and gas pipeline that would not;
                          −    result in the extension of the pipeline beyond the existing limits of the right-of-way or of
                               other property on which the pipeline is located,
                          −    be undertaken within 30 m of a water body, or
                          −    involve the likely release of a polluting substance into a water body, or result in an
                               increase in airborne emissions or noise during the operation of the facility;
                      •   the proposed addition or installation of any of the following components with respect to an
                          existing onshore oil and gas pipeline;
                          −    a new connection,
                          −    piping,
                          −    cathodic protection systems, including rectifiers,
                          −    valves, including valve vaults and pressure transmitters,
                          −    compressor and pump station components including compressors, pumps, motors,
                               silencers, scrubbers, gas seals, system boilers, scraper traps, switch gear, transformers
                               and uninterruptible power supply,
                          −    storage tank components, including mixers and ladders,
                          −    metering and regulating facilities,
                          −    quality measurement systems, including analyzers for water or basic sediment,
                               densitometers, calorimeters, in-line viscometers, gas chromatographs and
                               automatic/composite samplers, or
                          −    mechanical and electrical systems of a facility building, including plumbing, air
                               conditioning, heating and ventilation systems, not involving the use or disposal of
                               chlorofluorocarbons;
                      •   the foregoing list does not apply to the proposed addition or installation of a pipeline
                          component that would;
                          −    result in the extension of the pipeline beyond the existing limits of the right-of-way or of
                               other property on which the pipeline is located,

               27
                    SOR/99-437, as am. November 4, 1999.


 15-4                                               Newfoundland and Labrador Offshore Guide – January 2004
                                                                     15 – CEAA Environmental Assessment Process


                          −     be undertaken within 30 m of a water body, or
                          −     involve the likely release of a polluting substance into a water body, or result in an
                                increase in airborne emissions or noise during the operation of the facility.28

               Although this list clearly outlines the excluded activities, Proponents are encouraged to verify the
               regulations themselves or to contact the Agency directly, to ascertain whether their proposed project
               can be excluded from federal environmental assessment.

               Projects that are otherwise excluded are:
                      •   those projects to be carried out in response to a national emergency for which special
                          temporary measures are being taken under the Emergencies Act; or
                      •   those projects to be carried out in response to an emergency and which must be carried out
                          forthwith in the interest of preventing damage to property or the environment or in the
                          interest of public health or safety (ss. 7(1)(b) and (c) of the Act).

               If the project is found and confirmed to be in the Exclusion List, or otherwise excluded, then an
               environmental assessment is not required. If there is any ambiguity, it must be resolved and a
               determination made whether the project is excluded or not.


15-6           Is There a Federal Authority?
               Pursuant to subsection 2(1) of the Act, a “federal authority” means:
                          (a)     a Minister of the Crown in right of Canada;
                          (b)     an agency of the Government of Canada or other body established by or pursuant to
                                  an Act of Parliament that is ultimately accountable through a Minister of the Crown
                                  in right of Canada to Parliament for the conduct of its affairs;
                          (c)     any department or departmental corporation set out in Schedule I or II of the
                                  Financial Administration Act; and
                          (d)     any other body that is prescribed pursuant to regulations made under paragraph
                                  59(e).

               For the purposes of this Guide, the federal authorities that are most likely to be involved include:
                      •   the CNOPB;
                      •   the NEB;
                      •   DFO-Habitat Management and DFO-CCG;
                      •   Environment Canada; and
                      •   Industry Canada.

               In order for the Act to apply, a federal authority as defined above, must perform at least one of the
               four functions in relation to the project that are specified in section 15-7 below.

               Pursuant to subsection 11(1) of the Act, where an EA of a project is required, the federal authority
               whose functions trigger the EA process must ensure the EA is conducted as early as is practicable in
               the planning stages of the project and before irrevocable decisions are made. This federal authority is
               referred to as the “Responsible Authority” (RA).

               28
                    Exclusion List Regulations, as am. SOR/99-437, ss. 30.1-30.2.


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 15 – CEAA Environmental Assessment Process


15-6-1        Federal Coordination
               Subsection 4(b)(1) of the Act states that one of its purposes is “to ensure that Responsible
               Authorities carry out their responsibilities in a coordinated manner with a view to eliminating
               unnecessary duplication in the environmental assessment process.” Additionally, subsection 12.(1) of
               the Act specifies that “where there are two or more Responsible Authorities in relation to a project,
               they shall together determine the manner in which to perform their duties and functions under to the
               Act and regulations.”

               The mechanisms for achieving the above objectives are primarily found in section 12 of the Act and in
               the Regulations Respecting the Coordination by Federal Authorities of Environmental Assessment
               Procedures and Requirements (Federal Coordination Regulations)29

               Subsections 12.1 through 12.5 of the Act provide for the establishment and function of a Federal
               Environmental Assessment Coordinator (FEAC). The role of a FEAC is to coordinate the
               participation of federal authorities in the environmental assessment and to facilitate communication
               and cooperation among them and with provinces or other jurisdictions or participants.

               The FEAC ensures that potential RAs and expert FAs for a project are identified, and coordinates
               their involvement throughout the environmental assessment process. This includes ensuring that RAs
               fulfil their Public Registry and other obligations in a timely manner, and coordinating the FAs’
               involvement with other jurisdictions.

               The FEAC may establish and chair a committee composed of Responsible Authorities and expert
               federal authorities for the project and consult with the committee to establish timelines in relation to
               the assessment, and determine the timing of any public participation.

               Normally, the Agency is the FEAC if the project is subject to assessment in another jurisdiction (e.g.
               a province), or if the project is described in the Comprehensive Study List. For federal-only
               Screenings, the FEAC is one of the RAs for the project, or the sole RA if only one is involved. It is
               also possible for the Agency and RAs to agree that a RA be the FEAC for a multi-jurisdiction
               Screening or a Comprehensive Study, or that the Agency be the FEAC for a federal-only Screening
               involving multiple RAs.

               In addition to the coordination provisions of the Act, the Regulations Respecting the Coordination by
               Federal Authorities of Environmental Assessment Procedures and Requirements (Federal Coordination
               Regulations) seek to ensure that the federal EA process is timely and predictable, and that only one
               federal EA is conducted for a project. Key elements of the regulations include:
                     •   identification and notification of RAs and expert departments;
                     •   consultation on the scope of the environmental assessment;
                     •   establishment of time frames for federal coordination notifications and responses; and
                     •   coordination of all RA interests and involvement in Comprehensive Study recommendations.




               29
                    SOR/97-181.


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                                                                  15 – CEAA Environmental Assessment Process


               For projects where there is no RA identified at the outset, the regulations specify that a federal
               authority which has received a project description from a Proponent must determine whether it:
                    •   is likely to be an RA;
                    •   is not likely to be an RA; or
                    •   needs more information (ss. 3-4, Federal Coordination Regulations).

               A federal authority that has determined it is likely to require an EA must give written notice to other
               federal authorities who may be RAs or who may provide expert advice on the environmental effects of
               the project (ss. 5, Federal Coordination Regulations). In turn, these federal authorities must respond
               indicating whether they:
                    •   are likely to be an RA;
                    •   are not likely to be an RA;
                    •   possess expert knowledge with respect to the EA of the project; or
                    •   require further information. (ss. 6, Federal Coordination Regulations)

               For oil and gas projects in the Newfoundland and Labrador offshore, the CNOPB is likely to be a
               RA and is therefore a logical first point of contact for a project description. The Agency can also
               advise or assist with the federal coordination process, if requested.

               When preparing a project description, Proponents should consult the Agency’s Operational Policy
               Statement EPO/5 - 2000 Preparing Project Descriptions under the Canadian Environmental
               Assessment Act.


15-7           Is the Federal EA Process “Triggered” by a S. 5 Function?
               The federal environmental assessment process as set out in the Act is only triggered when a “federal
               authority” performs one or more of the following functions in relation to a “project:”
                    •   proposes the project;
                    •   issues some form of financial assistance to the project;
                    •   provides an interest in land to enable the project to be carried out; or
                    •   exercises a regulatory duty in respect of the project and that regulatory duty is specified in the
                        Law List Regulations.30

               These are examined in the subsections 15-7-1 to 15-7-4.


15-7-1         Project Proposal Trigger
               The first trigger is the project proponent trigger, where the federal authority “is the Proponent of the
               project and does any act or thing that commits the federal authority to carrying out the project in
               whole or in part” (s. 5(1)(a)).




               30
                S. 5(1), Act and Law List Regulations, SOR/99-330 and SOR/99-438, as am. July 28, 1999 and
               November 4, 1999 and SOR/2003-280 to 282 July 28, 2003.


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 15 – CEAA Environmental Assessment Process


15-7-2         Financial Trigger
               The second trigger is the financial trigger, where the federal authority:
                        “makes or authorizes payments or provides a guarantee for a loan or any other form of
                        financial assistance to the Proponent for the purpose of enabling the project to be carried out
                        in whole or in part, except where the financial assistance is in the form of any reduction,
                        avoidance, deferral, removal, refund, remission or other form of relief from the payment of
                        any tax, duty or impost imposed under any Act of Parliament, unless that financial assistance
                        is provided for the purpose of enabling an individual project specifically named in the Act,
                        regulation or order that provides the relief to be carried out” (s. 5(1)(b)).


15-7-3         Land Interest Trigger
               The third trigger is the land interest trigger, where the federal authority “has the administration of
               federal lands and sells, leases or otherwise disposes of those lands or any interests in those lands, or
               transfer the administration and control of those lands or interests to Her Majesty in right of a
               province, for the purpose of enabling the project to be carried out in whole or in part” (s. 5(1)(c),
               Act).

               When the CNOPB authorizes Development Plans and issues Production Licences, this trigger is
               exercised.


15-7-4         Law List Trigger
               The final trigger is the law list trigger, where a federal authority, “under a provision prescribed
               pursuant to paragraph 59(f), issues a permit or licence, issues an approval or takes any other action
               for the purpose of enabling the project to be carried out in whole or in part” (s. 5(1)(d), Act).

               Pursuant to paragraph 59(f), the Governor in Council has made the Law List Regulations,31
               prescribing provisions of Acts of Parliament and regulations made pursuant to any such Act that
               confer powers, duties or functions on federal authorities or on the Governor in Council, the exercise of
               which requires a federal EA. The following is a non-exhaustive list of the Law List triggers most
               likely to apply to oil and gas activities in offshore Newfoundland and Labrador:
                    •   Canada-Newfoundland Atlantic Accord Implementation Act – paragraph 138(1)(b) –
                        activity authorization; or paragraph 139 (4)(a) – development plan approval;
                    •   Canadian Environmental Protection Act, 1999 – s. 127(1), (formerly ss. 71(1) and 72(4)
                        of CEPA) – Environment Canada’s Disposal at Sea Permitting process;
                    •   Fisheries Act – s. 35(2) - DFO’s HADD approval process; or s. 32 – DFO authorization
                        for destruction of fish by means other than fishing (e.g. blasting);
                    •   National Energy Board Act – s. 108 – NEB’s Transboundary Pipeline Authorization
                        process; or s. 52 NEB certificate for a pipeline required for pubic convenience and
                        necessity;
                    •   Navigable Waters Protection Act – s. 5(1)(a) – DFO-CCG’s NWPA Approval process;
                        and

               31
                Law List Regulations, as am. July 28, 1999 and November 4, 1999, SOR/99-330 and SOR/99-438, and
               SOR/2003-280 to 282 July 28, 2003.


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                                                                  15 – CEAA Environmental Assessment Process


                   •    Radiocommunication Act – s. 5(1)(f) – Industry Canada’s licencing process for the
                        construction of communication towers.

               Once the Proponent applies to one of the above federal authorities for an Authorization, or when it is
               likely that an Authorization or Permit on the Law List will be required to allow the project to proceed
               in whole or in part, the appropriate FA(s) will become RA(s) and will be required to ensure that an
               environmental assessment is carried out.


15-7-5         Ministerial Discretion
               Where there is no “trigger,” the Minister has the discretionary power to refer the project to a
               Mediator or Review Panel (see below, sections 15-18 and 15-19) in the following circumstances:
                   •    where the Minister is of the opinion that the project may cause significant adverse
                        environmental effects in another province (s. 46(1), Act);
                   •    where the Minister or the Minister Responsible for Foreign Affairs is of the opinion that the
                        project may cause significant adverse environmental effects occurring both outside Canada
                        and outside those federal lands, (s. 47(1), Act);
                   •    where the Minister is of the opinion that the project may cause significant adverse
                        environmental effects on:
                        −    lands in a reserve that is set apart for the use and benefit of a band and that is subject to
                             the Indian Act,
                        −    a park or park reserve as defined in subsection 2(1) of the Canada National Parks Act;
                        −    federal lands other than those mentioned above,
                        −    lands that are described in a land claims agreement referred to in section 35 of the
                             Constitution Act, 1982 and that are prescribed,
                        −    lands that have been set aside for the use and benefit of First Nations pursuant to
                             legislation that relates to the self-government of First Nations and that are prescribed, or
                        −    lands in respect of which First Nations have interests (s. 48(1), Act).


15-8           CEAA Applies and Responsible Authorities Identified
               Once it is determined that the criteria set out in the above sections are met, the CEAA will apply and
               Responsible Authorities will be identified.

               Pursuant to subsection 11(1) of the Act, where an EA of a project is required, the federal authority
               whose functions trigger the EA process must ensure the EA is conducted as early as is practicable in
               the planning stages of the project and before irrevocable decisions are made. This federal authority is
               referred to as the “Responsible Authority” (RA).


15-8-1         Canadian Environmental Assessment Registry
               Section 55 of the Act describes requirements with respect to the Canadian Environmental
               Assessment Registry (Registry). The Registry consists of an Internet site and hard-copy project files.
               Its purpose is to facilitate public access to records relating to environmental assessments and to
               provide notice in a timely manner of the assessments. Responsibility for the Registry is shared by the
               Agency and the RA(s) as set forth in the legislation, and it must be operated in a manner to ensure



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 15 – CEAA Environmental Assessment Process


               convenient public access to it. The public registry is maintained throughout the EA process, including
               the follow-up stage.


15-9           Type of Environmental Assessment Determined by Regulation/RA
               Once the Responsible Authorities and expert departments have been identified, the type of
               environmental assessment is first determined by examining the relevant regulations. The two levels of
               environmental assessment: Comprehensive Studies and Screenings, are set out in 15-10 and 15-15
               below.

               It is important to note that once undertaken, the RA may delegate to any person, body or jurisdiction
               any part of the Comprehensive Study or Screening of a project, or the preparation of the
               Comprehensive Study Report or Screening Report, with the exception of decision-making pursuant
               to subsections 20(1), 37(1) (ss. 17(1), Act).

               Pursuant to sections 21 and 25 of the Act, the RA also has the authority to refer the project to a
               public review process (Mediation or Panel Review) - see sections 15-18 and 15-19 for further
               details.32


15-10          Comprehensive Study
               Pursuant to subsection 59(d) of the Act, the Governor in Council has prescribed projects and classes
               of projects for which a Comprehensive Study is required in the Comprehensive Study List
               Regulations.33 These are typically large or complex projects that are likely to cause significant adverse
               environmental effects. The offshore oil and gas projects which require a Comprehensive Study
               include:
                    •   the proposed construction, decommissioning or abandonment of:
                        −     a heavy oil or oil sands processing facility with an oil production capacity of more than
                              10 000 m3/d, or
                        −     an oil sands mine with a bitumen production capacity of more than
                              10 000 m3/d.
                    •   the proposed construction or installation of a facility for the production of oil or gas, if the
                        facility is located offshore and (a) is outside the limits of a study area delineated in an
                        environmental assessment for an offshore production project conducted by a CEAA Panel
                        or as a CEAA Comprehensive Study, or by an Environment Assessment and Review
                        Process Guidelines Order (EARPGO) Panel; or (b) is inside the limits of a study area
                        delineated in an environmental assessment described above and is not connected by a
                        pipeline to a previously assessed facility in the study area;
                    •   the proposed decommissioning or abandonment of a offshore facility for the production of oil
                        or gas if it is proposed that the facility be disposed of or abandoned offshore or converted on
                        site to another role;




               32
                  It is not unusual for an RA to refer the project to a public review process. For example, the RAs, in both the
               Sable Offshore Energy Project and the Terra Nova Project referred those projects to the Panel Review process.
               33
                  SOR/94-638, as am. SOR/99-439, and SOR/2003-280 to 282 July 28, 2003.


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                    •   the proposed expansion of a heavy oil or oil sands processing facility that would result in an
                        increase in oil production capacity that would exceed 5 000 m3/d and would raise the total
                        oil production capacity to more than 10 000 m3/d;
                    •   the proposed construction, decommissioning or abandonment or an expansion that would
                        result in an increase in production capacity of more than 35 per cent of;
                        −    an oil refinery, including a heavy oil upgrader, with an input capacity of more than
                             10 000 m3/d,
                        −    a facility for the production of liquid petroleum products from coal with a production
                             capacity of more than 2 000 m3/d,
                        −    a sour gas processing facility with a sulphur inlet capacity of more than 2,000 t/d,
                        −    a facility for the liquefaction, storage or regasification of liquefied natural gas, with a
                             liquefied natural gas processing capacity of more than 3 000 t/d or a liquefied natural
                             gas storage capacity of more than 50 000 t,
                        −    a petroleum storage facility with a capacity of more than 500 000 m3, or
                        −    a liquefied petroleum gas storage facility with a capacity of more than 100,000 m3,
                    •   the proposed construction of;
                        −    an oil and gas pipeline more than 75 km in length on a new right of way; or
                        −    an offshore oil and gas pipeline, if any portion of the pipeline is outside the limits of a
                             study area delineated in an environmental assessment for an offshore production project
                             conducted by a CEAA Review Panel or as a CEAA Comprehensive Study, or by an
                             EARPGO Panel;
                    •   a proposed offshore exploratory drilling project that is located outside the limits of a study
                        area34 delineated in an environmental assessment of an offshore exploratory drilling project or
                        production project that was conducted by a CEAA Review Panel or as a CEAA
                        Comprehensive Study under the Canadian Environmental Assessment Act or by an
                        EARPGO Panel.35

               Since the Act’s inception in 1995, Comprehensive Studies have been undertaken for approximately
               50 proposed projects.36 The duration of these Comprehensive Studies has ranged from 117 to 462
               days. Many factors may affect the timing. Chief among them are: the preparation of analysis and data
               by the Proponent, public consultations by the Proponent, and the need to consult with other federal
               departments and jurisdictions. Most often, the RAs have accepted the Proponent’s Environmental
               Impact Statement as the basis of the Comprehensive Study, to be circulated to other federal
               departments and to the public.


15-10-1        Public Review of Project Scope
               Public participation in Comprehensive Studies is mandatory during the scoping of the study (s.
               21(1), Act), during the conduct of the study (s. 21.2, Act) and after the Comprehensive Study
               Report has been completed, when the Agency invites the public to review and comment on the report
               (s. 22(1), Act).



               34
                  Two designated study areas exist within the offshore areas of Newfoundland and Labrador and Nova Scotia,
               one on the Grand Banks and the other on the Scotian Shelf. The CNOPB and the CNSOPB should be
               consulted for designated study area locations.
               35
                  Comprehensive Study List Regulations, subsections 11-15.
               36
                  Canadian Environmental Assessment Agency Internet Site (http://www.ceaa-acee.gc.ca).


 Newfoundland and Labrador Offshore Guide – January 2004                                                           15-11
 15 – CEAA Environmental Assessment Process


15-11          EA Track Report to Minister
               Section 21(2) of the Act requires the Responsible Authority to prepare a report to the Minister
               regarding the scope of the review, public concerns, potential for adverse environmental effects and the
               ability of the Comprehensive Study to address issues related to the project. The report must also
               recommend to the Minister to either continue with the Comprehensive Study, or refer the project to a
               Mediator or Review Panel in accordance with section 29.


15-12          Minister Determination of Scope of EA
               After considering the report, the Minister must then either refer the project to a Review Panel
               (15-18) or Mediator (15-19), or refer it back to the Responsible Authority to complete the
               Comprehensive Study, (15-12-1) after which it cannot be referred to a Review Panel or Mediator.

               Public participation undertaken to comply with sections 21(2) and 21.2 of the Act may take the form
               of public meetings, open houses, advisory committees, workshops, community liaison office and site
               visit (15-12-2).


15-13          Comprehensive Study Report to the Minister and Agency
               After the Responsible Authority completes the Comprehensive Study, it must provide a
               Comprehensive Study Report (CSR) to the Minister and the Agency (s. 21.1(1)(a)). The Agency,
               on behalf of the Minister of the Environment, is responsible for managing a review and comment
               period after the submission of the CSR (15-13-1). The Agency typically has provided a comment
               period for a minimum of 30 days, though the period has been as long as 60 days and, as low as 15
               days (following a previous 30-day review period held by a provincial government). Once the Agency
               receives comments from the public, it may, if appropriate, require the Proponent or RA to address
               issues raised by the public.


15-14          Agency Prepares Report
               After these comments are addressed, the Agency prepares a report, making recommendations to the
               Minister, who issues a decision statement that sets out the Minister’s opinion as to whether the project
               is or is not likely to cause significant adverse environmental effects, and sets out any mitigation
               measures or follow-up program that the Minister considers appropriate (s. 23(1)). Before issuing the
               decision statement, the Minister may request additional information from any Responsible Authority
               or expert federal authority for the project, or may request additional actions to address public concerns
               (s. 23(2)).

               If significant effects are not likely, the RA may exercise any power or perform any duty or function
               that would permit the project to be carried out in whole or in part. If significant effects are likely, the
               RA may not exercise any power or perform any duty or function that would permit the project to be
               carried out in whole or in part without the approval of the Governor in Council (s. 37)

               Atlantic region oil and gas projects which have been assessed as a Comprehensive Study include: the
               Newfoundland Trans-shipment Terminal, the White Rose Oilfield Development, the Deep Panuke
               Offshore Gas Development, and the Halifax and Saint John Lateral Pipelines.


 15-12                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                    15 – CEAA Environmental Assessment Process


15-15          Screening
               Screenings make up over 99 percent of the approximately 5-6,000 federal environmental assessments
               conducted annually under the Canadian Environmental Assessment Act.37 Screenings are required for
               all projects (see section 15-2 of this Guide) for which there is a triggered federal authority (see section
               15-7 of this Guide), unless they require Comprehensive Study.

               Screenings are self-directed processes carried out in accordance with section 18 of the Act. In
               practice, RAs have frequently decided to allow the Proponent’s Environmental Impact Statement to
               serve as the Screening document to be evaluated by the Responsible Authorities and, if appropriate,
               the public. Scoping is the responsibility of RA(s) and must be agreed to by the RA(s). Where the
               Responsible Authorities are of the opinion that the information provided is not adequate to enable
               them to take a course of action, they shall ensure that any necessary studies and information are
               undertaken or collected (s. 18(2), CEAA).

               The time taken to complete a Screening can vary from one day for a small, simple project, to several
               months, or even beyond, for more complex undertakings. However, under section 20(4) of the Act, a
               Responsible Authority cannot take a course of action under s. 20(1) before the 15th day after
               inclusion on the Internet site of (a) a notice of the commencement of the environmental assessment
               (b) a description of the scope of the project and (c) where the RA, in accordance with section 18(3)
               of the Act, has given the public an opportunity to participate in the Screening, a description of the
               factors to be considered and the scope of those factors, or an indication of how such a description may
               be obtained.

               Since 1996, the Agency has worked with other departments, agencies and other industry or
               environmental groups to promote the Class Screening concept and to provide advice and assistance in
               developing model reports, pursuant to section 19 of the Act. Class Screenings are appropriate for
               projects that are repetitive in nature and whose environmental effects are well understood. To date, no
               Screening of offshore oil and gas activities has been declared as a Class Screening by the Agency.


15-15-1        Public Participation, If Appropriate
               As Screenings are self-directed assessments, the Responsible Authorities have some discretion in
               determining how the assessment will be conducted, such as the extent to which public is required.
               (s. 18(3), Act).


15-16 & 15-17 Determination by Responsible Authorities/Minister: Any Need for
              Further Assessment?
               Once the Screening has been completed, the Responsible Authorities/Minister of the Environment
               must determine whether the effects are acceptable or not, and whether further assessment is needed.
               The factors to be considered for every environmental assessment, including Screenings,




               37
                    Canadian Environmental Assessment Agency Internet Site (http://www.ceaa-acee.gc.ca).


 Newfoundland and Labrador Offshore Guide – January 2004                                                          15-13
15 – CEAA Environmental Assessment Process


              Comprehensive Studies, Panel Reviews and Mediation (examined below) are the same. They
              include:
                     •    the environmental effects of the project, including the environmental effects of malfunctions or
                          accidents that may occur in connection with the project and any cumulative environmental
                          effects that are likely to result from the project in combination with other projects or activities
                          that have been, or will be, carried out;
                     •    the significance of these effects;
                     •    comments from the public that are received in accordance with this Act and the associated
                          regulations;
                     •    measures that are technically and economically feasible and that would mitigate any
                          significant adverse environmental effects of the project; and
                     •    any other matter relevant to the Screening, Comprehensive Study, Mediation or assessment
                          by a Review Panel. This may include the need for alternatives to the project that the
                          Responsible Authority, or the Minister38 after consulting with the Responsible Authority,
                          may require to be considered (ss. 16(1)(a) to (e), Act).

              In addition to the above factors, every Comprehensive Study, Panel Review and Mediation must
              include, and any Screening may include (s. 16(1)(e), Act), a consideration of the following factors:
                     •    the purpose of the project;
                     •    alternative means of carrying out the project that are technically and economically feasible, as
                          well as the environmental effects of any such alternative means;
                     •    the need or requirement for any follow-up program in respect of the project; and
                     •    the capacity of renewable resources, that are likely to be significantly affected by the project,
                          to meet the needs of the present and those of the future (s. 16(2), Act).

              Community knowledge and Aboriginal traditional knowledge may be considered in conducting an
              environmental assessment (s. 16.1 of the Act). As well, the results of regional environmental
              assessments may be taken into account in conducting an environmental assessment of a project in the
              region, which may be particularly useful when considering cumulative effects.

              Following a Screening, the RA must take one of the following courses of action:
                          (a)     subject to subparagraph (c)(iii), where, taking into account the implementation of any
                                  mitigation measures that the Responsible Authority considers appropriate, the project
                                  is not likely to cause significant adverse environmental effects, the Responsible
                                  Authority may exercise any power or perform any duty or function that would permit
                                  the project to be carried out and shall ensure that any mitigation measures that the
                                  Responsible Authority considers appropriate are implemented;
                          (b)     where, taking into account the implementation of any mitigation measures that the
                                  Responsible Authority considers appropriate, the project is likely to cause significant
                                  adverse environmental effects that cannot be justified in the circumstances, the
                                  Responsible Authority shall not exercise any power or perform any duty or function
                                  conferred on it by or under any Act of Parliament that would permit the project to be
                                  carried out in whole or in part; or




              38
                   The Minister will not intervene in the case of a screening.


15-14                                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                                   15 – CEAA Environmental Assessment Process


                        (c)    where
                                (i)     it is uncertain whether the project, taking into account the implementation of
                                        any mitigation measures that the Responsible Authority considers
                                        appropriate, is likely to cause significant adverse environmental effects,
                                  (ii) the project, taking into account the implementation of any mitigation
                                        measures that the Responsible Authority considers appropriate, is likely to
                                        cause significant adverse environmental effects and paragraph (b) does not
                                        apply, or
                                  (iii) public concerns warrant a reference to a Mediator or a Review Panel,
                                        the Responsible Authority shall refer the project to the Minister for a referral
                                        to a Mediator or a Review Panel in accordance with section 29 (s. 20(1),
                                        Act).

               Subsection 28(1) of the Act provides the Minister with discretionary powers to require further
               assessment. It reads as follows:
                        Where at any time the Minister is of the opinion that;
                        (a) a project for which an environmental assessment may be required under section 5,
                             taking into account the implementation of any appropriate mitigation measures, may
                             cause significant adverse environmental effects, or
                        (b) public concerns warrant a reference to a Mediator or a Review Panel,
                             the Minister may, after offering to consult with the jurisdiction…where the project is to
                             be carried out and after consulting with the Responsible Authority or, where there is
                             no Responsible Authority in relation to the project, the appropriate federal authority,
                             refer the project to a Mediator or a Review Panel in accordance with section 29.

               If the RA or the Minister does not take action to allow the project to be carried out, the Proponent
               may wish to adjust the proposal and resubmit the project to the RA. If the RA or the Minister decide
               that the project warrants further assessment, it will be further assessed through a Panel Review or
               through Mediation. These alternatives are examined in sections 15-18 and 15-19 respectively.


15-18          Panel Reviews
               To date, there have been nine projects which have been, or are presently, under review by a Panel,
               pursuant to sections 33-35 of the CEAA. The majority of these reviews were performed jointly, either by
               combining the federal process with that of a provincial jurisdiction, or by combining it with another federal
               review process, such as that of the NEB. To date in Atlantic Canada, there have been two completed
               federal EA Panel Reviews of oil and gas projects under the Environmental Assessment and Review
               Process Guidelines Order (“EARPGO,” the predecessor to the Act) and two under the Act:
                   •    the Hibernia Development Project, for an offshore oil development on the Grand Banks,
                        conducted jointly by the governments of Canada and Newfoundland and Labrador
                        (EARPGO);
                   •    the Venture Development Project, for an offshore natural gas development on the Scotian
                        Shelf, conducted jointly by the governments of Canada and Nova Scotia (EARPGO);
                   •    the Sable Offshore Energy Project, for an offshore natural gas development in Nova Scotia
                        and export pipeline, conducted jointly by the governments of Canada and Nova Scotia (the
                        Act); and




 Newfoundland and Labrador Offshore Guide – January 2004                                                              15-15
 15 – CEAA Environmental Assessment Process


                    •   the Terra Nova Project, for an offshore oil development conducted by a joint federal-
                        provincial Panel, established under the Accord Acts and the CEAA.

               A Review Panel must, in accordance with any regulations made for that purpose and with its terms of
               reference:
                    •   ensure that the information required for an assessment by a Review Panel is obtained and
                        made available to the public;
                    •   hold hearings in a manner that offers the public an opportunity to participate in the
                        assessment;
                    •   prepare a report setting out;
                        −   the rationale, conclusions and recommendations of the Panel relating to the
                            environmental assessment of the project, including any mitigation measures and follow-
                            up program, and
                        −   a summary of any comments received from the public;
                    •   submit the report to the Minister and the Responsible Authority (s. 34, CEAA).

               In the past, Panels have been responsible for developing their own operational and hearing
               procedures. This led to some delays and to inconsistencies from one review to another. New Panel
               procedures, in the form of Ministerial guidelines, have been developed and establish specified time
               periods for the different phases of the review under the control of the federal government.39 These
               procedures also include measures to promote public participation in the process, providing more time
               for participants to prepare for hearings, opportunities for direct questioning and public meetings to
               discuss the adequacy of the Proponent’s Environmental Impact Statement. At the end of the Panel
               Review process, a report must be prepared by the Panel for review by the Minister who makes the
               report available to the public (s. 36, CEAA).


15-19          Mediation
               To date, a formal Mediation process, as set out in sections 29 through 32 of the Act, has not been
               used in an environmental assessment. However, Mediation and other alternate dispute resolution
               methods have been used by the Agency, Responsible Authorities and interested parties on an
               informal basis in several environmental assessments.

               At the end of the Mediation process, a report must be prepared by the Mediator for Ministerial
               review and released to the public.


15-20          Final Determination by Responsible Authorities/Minister
               Upon review of the Panel Review report or the Mediator’s report, the following process will occur:
                        (a)    the Responsible Authority shall take into consideration the report and, with the
                               approval of the Governor in Council, respond to the report;
                        (b)    the Governor in Council may, for the purpose of giving the approval referred to in
                               paragraph (a), require the Mediator or Review Panel to clarify any of the
                               recommendations set out in the report; and

               39
                 Ministerial Guideline, Canadian Environmental Assessment Act, s. 58(1)(a), Procedures for an Assessment
               by a Review Panel, November 1997.


 15-16                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                 15 – CEAA Environmental Assessment Process


                       (c)    the Responsible Authority shall take a course of action under subsection (1) that is in
                              conformity with the approval of the Governor in Council referred to in paragraph (a)
                              (s. 37(1.1), Act.

               The RAs then must take one of the following courses of action:
                       (a)    where, taking into account the implementation of any mitigation measures that the
                              Responsible Authority considers appropriate,
                                (i) the project is not likely to cause significant adverse environmental effects, or
                                (ii) the project is likely to cause significant adverse environmental effects that can be
                                     justified in the circumstances,
                              the Responsible Authority may exercise any power or perform any duty or function
                              that would permit the project to be carried out in whole or in part and shall ensure
                              that those mitigation measures are implemented; or
                       (b)    where, taking into account the implementation of any mitigation measures that the
                              Responsible Authority considers appropriate, the project is likely to cause significant
                              adverse environmental effects that cannot be justified in the circumstances, the
                              Responsible Authority shall not exercise any power or perform any duty or function
                              conferred on it by or under any Act of Parliament that would permit the project to be
                              carried out in whole or in part (s. 37(1), Act).


15-21          Project May Proceed with Mitigation Measures Implemented
               Following a positive determination by a Responsible Authority or the Minister to take action to allow
               the project to be carried out, the project may proceed with mitigation measures implemented, as
               appropriate.


15-22          Follow-Up Mitigation Measures and Programs
               Where the RAs have exercised their powers or performed their duties and functions in a manner that
               allows the project to proceed, they must ensure that their recommended mitigation measures, if any,
               are implemented with respect to the project (s. 37(2), Act).

               Furthermore, they may design any follow-up program that they consider appropriate for the project
               and arrange for the implementation of that program (s. 38(1), Act). Pursuant to subsection 17(1) of
               the Act, RAs may delegate to any person, body or jurisdiction any part of the design and
               implementation of a follow-up program, but may not delegate the duty to take a course of action,
               pursuant to the Act.

               Where a Responsible Authority takes a course of action to allow a project to proceed after a
               Screening, it must consider the need for and requirements of a follow-up program. Where a similar
               course of action is taken after a Comprehensive Study, a follow-up program is required. Where a
               follow-up program is required, the Responsible Authority must ensure it is implemented (s. 38, Act).




 Newfoundland and Labrador Offshore Guide – January 2004                                                          15-17
15 – CEAA Environmental Assessment Process



Notes




15-18                                   Newfoundland and Labrador Offshore Guide – January 2004
                                    16 – Fisheries Act and Navigable Waters Protection Act Authorizations



              16.0 FISHERIES ACT AND NAVIGABLE WATERS
                   PROTECTION ACT AUTHORIZATIONS

              Chapter 16 describes the steps followed in the issuance of a Fisheries Act (FA) Authorization or a
              Navigable Waters Protection Act (NWPA) Approval. Chart 16 illustrates these procedures.

              Fisheries and Oceans Canada (DFO) may require Operators in the Newfoundland and Labrador
              offshore area to obtain regulatory approvals under two different statutes. The Habitat Management
              staff of DFO (Habitat Management staff) administers authorizations under subsection 35(2) of the
              Fisheries Act. An Authorization may be required under the Fisheries Act if a proposed work has the
              potential to result in the harmful alteration, disruption or destruction of fish habitat (HADD). The
              Canadian Coast Guard (DFO-CCG) issues approvals or authorizations under the Navigable Waters
              Protection Act (NWPA). An approval may be required under the Navigable Waters Protection Act
              in cases where proposed development activities have the potential to interfere with navigable waters.

              Both of these requirements are signed by the Regional Director General. NWPA authorizations can
              also be signed by the Officer for some sections, but “formal” approvals may be signed by the Area
              Director for NWPA s. 5(1) through 6(4), or the Regional Superintendent of Navigable Waters
              Protection. For a description of DFO’s mandate, consult Appendix A of this Guide.

              This chapter is only a summary of the various requirements. Applicants are advised to consult the
              official documents of Fisheries and Oceans Canada to ensure they have satisfied all necessary
              requirements.


16-1          Applicant Proposes Development Initiatives to DFO Habitat
              Management Staff and DFO-CCG
              Depending on the nature of the proposed operations, a subsection 35(2) Fisheries Act Authorization
              and/or a subsection 5(1) NWPA Formal Approval may be required. Fisheries Act authorizations are
              a voluntary requirement, initiated by the Applicant as a legal step to avoid possible prosecution under
              the Act. NWPA authorizations are mandatory.

              Either the Habitat Management staff or DFO-CCG may be apprised of the proposed developments
              by direct notification from the Applicant, through the CNOPB or another federal agency as per the
              Federal Coordination Regulations of CEAA (See Chapter 15) or through a provincial agency.40
              Regardless of the form of notification, early contact with the DFO is strongly advised so that any
              issues related to protection and conservation of fish and fish habitat or navigation can be identified
              and addressed.




              40
                DFO has a working arrangement through the Environmental Assessment Section of the NL Department of
              Environment (NDOE). Through this arrangement, DFO-Habitat Management Staff is alerted of activities
              being reviewed by the province.


Newfoundland and Labrador Offshore Guide – January 2004                                                         16-1
16 – Fisheries Act and Navigable Waters Protection Act Authorizations




16-2                                        Newfoundland and Labrador Offshore Guide – January 2004
                                     16 – Fisheries Act and Navigable Waters Protection Act Authorizations


              A project description is generally the method of notification or referral to the DFO. A Project
              Description should include:
                   •   a description of the existing biophysical oceanic environment (such as substrate type, general
                       oceanography and biology);
                   •   a description of the existing biophysical aquatic environment (substrate, physical and
                       biological oceanography)
                   •   a description of fish, fish habitat and fisheries in the project area;
                   •   a description of the proposed project and associated activities and their potential impacts on
                       the environment;
                   •   a description of any proposed mitigation measures; and
                   •   a description of any navigable waters (see 16-10 below).


16-2          Determination of Whether a Subsection 35(2) Fisheries Act
              Authorization Is Required
              An Authorization pursuant to subsection 35(2) of the Fisheries Act may be required if a proposed
              project has the potential to result in the harmful alteration, disruption or destruction of fish habitat
              (HADD).

              Subsection 35(1) is a straightforward prohibition, it states:
                       (1)    No person shall carry on any work or undertaking that results in the harmful
                              alteration, disruption or destruction of fish habitat.

              Subsection 35(2) qualifies the prohibition by explaining that the federal Minister of Fisheries and
              Oceans may authorize exceptions, it states:
                       (2)    No person contravenes section (1) by causing the alteration, disruption or destruction
                              of fish habitat by any means or under any conditions authorized by the Minister or
                              under regulations made by the Governor in Council under this Act.

              Any contravention of subsection 35(1) of the Fisheries Act is liable under summary conviction. In
              cases where a proposed undertaking is likely to result in the HADD of fish habitat that cannot be
              fully mitigated, but can be compensated to achieve “no net loss” of fish habitat, a subsection 35(2)
              Fisheries Act Authorization may be issued in accordance with DFO’s Policy for the Management of
              Fish Habitat (the Policy).41 Once a subsection 35(2) Authorization is issued in accordance with the
              Act and HADD of fish habitat occurs as prescribed in the document, it is not an offence under the
              Act.

              The objective of the Policy is to achieve a net gain of fish habitat for Canada’s fisheries resources by
              protecting habitat from adverse effects in accordance with the guiding principle of no net loss of
              productive capacity of fish habitat.42

              41
                 “The Department of Fisheries and Oceans Policy for the Management of Fish Habitat” (Ottawa: DFO,
              October 7, 1986),; and, Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines
              Developed from the Policy for the Management of Fish Habitat (1986),” 1998 2nd ed., (Ottawa: DFO,
              1998); Fisheries and Oceans Canada, “Fish Habitat Conservation and Protection - Guidelines for Attaining
              No Net Loss” (Ottawa: DFO, 1995);
              42
                 See Fisheries and Oceans Canada, “Summary Fish Habitat Management Policy” (Ottawa: DFO: 1986).


Newfoundland and Labrador Offshore Guide – January 2004                                                             16-3
16 – Fisheries Act and Navigable Waters Protection Act Authorizations


               Under the Policy, DFO strives to balance unavoidable habitat losses with habitat replacement
               (compensation) such that further reductions to Canada’s fisheries resources due to habitat loss or
               damage may be prevented.43 A subsection 35(2) Fisheries Act Authorization generally lists the
               appropriate terms and conditions for project operation which includes the Compensation Agreement
               between DFO and the Proponent, which comprises a legally binding contractual arrangement
               between both parties.

               In order to ascertain whether a subsection 35(2) Authorization is necessary, a series of questions must
               be addressed, including:
                    •     Is fish habitat present?
                    •     Is the proposed undertaking likely to result in a HADD of fish habitat?
                    •     Can HADD be avoided through project relocation/redesign?
                    •     Can the Impacts be fully mitigated?
                    •     Can the HADD be compensated?

               The significance of each of these questions is discussed in sections 16-3 through 16-7.
               A subsection 35(2) Authorization does not permit activities which result in the deposition of
               deleterious substances, pursuant to subsection 36(3) of the Fisheries Act. Environment Canada
               administers section 36 of the Act.

               “Deleterious substance” is defined in subsection 34(1) of the Fisheries Act as:
                        (a)   any substance that, if added to any water, would degrade or alter or form part of a
                              process of degradation or alteration of the quality of that water so that it is rendered or is
                              likely to be rendered deleterious to fish or fish habitat or to the use by man of fish that
                              frequent that water, or
                        (b)   any water that contains a substance in such quantity or concentration, or that has been so
                              treated, processed or changed, by heat or other means, from a natural state that it would,
                              if added to any other water, degrade or alter or form part of a process of degradation or
                              alteration of the quality of that water so that it is rendered or is likely to be rendered
                              deleterious to fish or fish habitat or to the use by man of fish that frequent that water.


16-3 & 16-3-1 Is “Fish Habitat” Present? If Not, Subsection 35(2) Authorization
              Not Required
               “Fish habitat” is defined by subsection 34(1) of the Fisheries Act as:
                          spawning grounds and nursery, rearing, food supply and migration areas on which fish
                          depend directly or indirectly in order to carry out their life processes.




               43
                 For a succinct summary on the issuance of s. 35(2) FA authorizations, see: Fisheries and Oceans Canada,
               “Fish Habitat Conservation and Protection - What the Law Requires The Directive on the Issuance of
               Subsection (2) Authorizations” ( Ottawa: DFO, 1995).


16-4                                               Newfoundland and Labrador Offshore Guide – January 2004
                                     16 – Fisheries Act and Navigable Waters Protection Act Authorizations


              The Fisheries Act defines “fish” as:
                       (a )     parts of fish;
                       (b)      shellfish, crustaceans, marine animals and any parts of shellfish, crustaceans or
                                marine animals; and
                       (c)      the eggs, sperm, spawn, larvae, spat and juvenile stages of fish, shellfish, crustaceans
                                and marine animals.

              Section 35 of the Fisheries Act is for the protection of fish habitat for the benefit of fisheries. The
              HADD decision process must determine whether or not the potentially affected fish habitat directly
              or indirectly supports — or has the potential to support — a commercial, recreational or aboriginal
              fishery. If fish habitat is present, the following questions (16-4 to 16-7) must be addressed. If there is
              no fish habitat present, a subsection 35(2) Fisheries Act authorization is not required.


16-4          Is the Proposed Undertaking Likely to Result in a HADD of Fish
              Habitat?
              In order to determine the potential impacts of a proposed project on fish habitat, the project’s design
              details, construction methodology, location, scheduling and operation must be reviewed and the direct
              and indirect impacts analyzed. Biophysical information is required to characterize the habitat, to
              determine the fish species using the habitat at the project site and the area impacted by the project.
              The suitability of the habitat to provide the life requisites for fish is then assessed to determine if the
              project is likely to result in the HADD of fish habitat. It is the responsibility of the proponent to
              supply the information needed to make the HADD determination.


              To determine whether the proposed undertaking is likely to result in a HADD, the following factors
              may be considered:
                   •   the project’s potential to affect fish, fish habitat and fisheries, and the nature of the impact (in
                       consideration of fish life stages, their habitat, productive capacity, and habitat utilization
                       sensitivities);
                   •   the presence or abundance of fish species that support, or have the potential to support
                       subsistence, commercial and/or recreational fisheries;
                   •   project impacts to bio-physical attributes such as substrate, aquatic vegetation, currents,
                       sedimentation, physical oceanography, water quality, etc.;
                   •   if vulnerable, threatened, endangered or SARA aquatic listed species or their critical habitat
                       are present;
                   •   the type and extent of habitat to be impacted (spatial context);
                   •   the timing of the project construction/operation in relation to habitat utilisation (temporal context);
                   •   construction, operation and decommissioning or abandonment details of the project;
                   •   changes to the integrity of the habitat (future habitat impacts);
                   •   short-term and long-term impacts to key habitat components and life processes of fish;
                   •   the availability and anticipated effectiveness of proposed mitigation and/or compensation
                       measures; and,
                   •   all other factors that habitat staff deems important to consider on a project specific basis.44

              44
               Fisheries and Oceans Canada, “Fish Habitat Conservation and Protection - Guidelines for Attaining No
              Net Loss” (Ottawa: DFO, 1995) at p. 7 and Fisheries and Oceans Canada, “Decision Framework for the


Newfoundland and Labrador Offshore Guide – January 2004                                                                 16-5
 16 – Fisheries Act and Navigable Waters Protection Act Authorizations


                If the proposed project does not have the potential to cause a HADD of fish habitat, then a
                subsection 35(2) Fisheries Act Authorization is not required. If the proposed project is likely to result
                in a HADD of fish habitat, a hierarchy of options is identified by the Habitat Management staff to
                protect habitat from any adverse effects. This is carried out in accordance with the ‘No Net Loss’
                Guiding Principle of DFO’s Policy for Management of Fish Habitat. The hierarchy of options (in
                order of preference) is as follows:
                    •    project relocation;
                    •    project redesign;
                    •    mitigation of adverse impacts in cases where project relocation and redesign are not
                         possible;45 and/or
                    •    habitat compensation.


 16-5           Can HADD be Avoided through Project Relocation, Redesign or
                Mitigation?
                These options are outlined in sections 16-5 and 16-6. In practice, relocation, redesign and mitigation
                are frequently used in combination to avoid HADD of fish habitat, and to ensure that projects
                comply with the habitat protection provisions of the Fisheries Act and the Policy for the Management
                of Fish Habitat.


16-5-1          HADD can be Avoided through Project Relocation or Redesign —
                Applicant May Incorporate Changes and Resubmit Proposal
                The DFO prefers to maintain natural habitat as much as possible because the factors and processes
                responsible for making a habitat productive are highly complex. If a HADD may be avoided through
                project relocation or redesign, the Habitat Management staff may contact the Applicant to suggest
                that he/she incorporate the necessary changes and resubmit the proposal.

                Relocation may be suggested, particularly if:
                    •    the project represents a substantial risk to critical habitats (i.e., habitats that are necessary for
                         the survival of a particular species);
                    •    the habitat’s productive capacity is high; and/or
                    •    the habitat is particularly important to critical life stages of a fish species

                If project relocation is not possible, the next preferred option is project redesign. This option is also
                typically applied when a project represents a risk to critical or important habitats such as those with
                high productive capacity or those that are critical to certain life stages of a fish species.




                Determination and Authorization of Harmful Alteration, Disruption or Destruction of Fish Habitat” (Ottawa:
                DFO, 1998) at p. 9.
                45
                   See Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines Developed from the
                Policy for the Management of Fish Habitat (1986),” 1998 2nd ed. (Ottawa: DFO, 1998) at p. 4 and
                Fisheries and Oceans Canada, “Fish Habitat Conservation and Protection - Guidelines for Attaining No Net
                Loss” (Ottawa: DFO, 1995) at p. 8.


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                                    16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-6          Can the Impacts be Fully Mitigated? — Letter of Advice is Issued to
              Applicant
              Under the Habitat Policy, mitigation is defined as, “action taken during the planning, design,
              construction and operation of works and undertakings to alleviate potential adverse effects on the
              productive capacity of fish habitats.” The term mitigation is also meant to include measures which are
              undertaken to maintain habitat or to prevent residual damage to habitat at the project site or that
              occurs as a direct result of the project.

              Mitigative measures may be implemented during project planning, design, construction, operation
              and/or decommissioning and abandonment to avoid HADD of fish habitat. The Proponent is
              responsible for the preparation of mitigation plans and their effectiveness.

              If the impacts of a project can be fully mitigated, a subsection 35(2) Fisheries Act Authorization is
              not required; instead, a Letter of Advice may be issued (16-6-1). The purpose of the Letter of
              Advice is to concur with proposed mitigative measures within the application and/or suggest further or
              contingent mitigative measures.46

              Mitigation measures are dependent on the site-specific conditions of the project. Commonly used
              marine mitigation measures include:
                   •   defining timing windows for work to minimize interference with critical life processes, such as
                       fish migration and spawning;
                   •   selecting the least harmful equipment, materials, and construction methods;
                   •   implementing measures to control cutting deposition at drill sites;
                   •   a combination of such measures.47


16-7          Should the HADD be Authorized?
              When the conclusion reached is that the proposed project will likely result in a HADD – even with
              the application of mitigation measures – an Authorization is required for the project to proceed. At
              this point in the process a decision is required about whether the likely HADD of fish habitat is
              acceptable and should be authorized. This determination will consider the following items:
                   •   fisheries management or fish population objectives;
                   •   whether or not the species at risk is considered vulnerable, threatened or endangered and
                       supports, or has the potential to support a fishery;
                   •   whether or not SARA aquatic listed species or their critical habitat are present;
                   •   whether the habitat is critical or supporting an active fishery;
                   •   the productive capability of the habitat to support various fish species and their different life
                       stages/processes;
                   •   proportion of similar habitats contributing to the production of the fish stock that may be
                       affected;
                   •   the habitat’s resilience to change and the amount of time it would need to recover;


              46
                 See Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines Developed from the
              Policy for the Management of Fish Habitat (1986),” 1998 2nd ed. (Ottawa: DFO, 1998) at p. 5.
              47
                 See Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines Developed from the
              Policy for the Management of Fish Habitat (1986),” 1998 2nd ed. (Ottawa: DFO, 1998) at p. 8.


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 16 – Fisheries Act and Navigable Waters Protection Act Authorizations


                     •   the availability of technically feasible habitat compensation options and the compatibility with
                         the hierarchy of compensation options; and
                     •   whether the authorization would set a precedent that could lead to future cumulative impacts.


16-7-1          Subsection 35(2) Fisheries Act Authorization Not Issued and Appeal May
                be Initiated
                In cases where it is determined that a HADD of fish habitat is unacceptable, DFO is not obliged to
                issue an Authorization. In this case, the Applicant still has the options of relocating or redesigning
                and resubmitting the proposal to fully mitigate the potential adverse effects of the proposed project.

                The Applicant may also decide to initiate an appeal of the decision to senior management of DFO,
                pursuant to the internal appeal process under the Policy for the Management of Fish Habitat.48 The
                Policy allows for three types of appeals:
                     •   should any person feel aggrieved by a habitat-related decision made by departmental staff,
                         that person may at any time request a review of the decision by senior management levels
                         within the Department, including Regional Director-Generals, the Deputy Minister or the
                         Minister of Fisheries and Oceans;
                     •   should any proponent or interested party feel aggrieved by the decision-making process an
                         appeal may be made to senior management levels within the Department or to the Minister;
                         and
                     •   in the event of an unresolved dispute regarding a major development project, the Minister
                         may agree to refer the project to an independent body or panel for review and
                         recommendations (refer to p. 26 of DFO’s Policy for the Management of Fish Habitat).


 16-8           Subsection 35(2) Fisheries Act Authorization Required
                Once it has been determined that a subsection 35(2) Fisheries Act Authorization is required and can
                be authorized, then the DFO Habitat Management staff, a federal authority under the CEAA, is
                required to conduct an environmental assessment of the project pursuant to the provisions of the
                CEAA. (Refer to Chapter 15 for the CEAA Environmental Assessment process.)


16-8-1          Possible Public Consultations
                In cases where major development projects are being considered, the Habitat Management staff may
                undertake public consultations. This is particularly common in situations where it may not be feasible
                to avoid habitat loss or damage.49 Such public consultations may be undertaken in conjunction with
                the environmental assessment required under CEAA.




                48
                   Department of Fisheries and Oceans, “The Department of Fisheries and Oceans Policy for the Management
                of Fish Habitat” (Ottawa: DFO: October 7, 1986).
                49
                   See Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines Developed from the
                Policy for the Management of Fish Habitat (1986),” 1998 2nd ed. (Ottawa: DFO, 1998) at p. 15.


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                                     16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-9          Environmental Assessment under CEAA Triggered
              Once it is determined that a subsection 35(2) Fisheries Act Authorization is required, DFO, a
              federal authority under the CEAA, has to ensure that an environmental assessment is conducted.

              The CEAA process is the same for the subsection 35(2) Fisheries Act Authorization as it is for the
              subsection 5(1) NWPA Formal Approval process. Should the two approvals be required for a
              particular project, the Habitat Management staff of DFO will conduct only one environmental
              assessment. Before setting out the common CEAA process, the following sections outline the
              preliminary steps in determining whether a subsection 5(1) NWPA Formal Approval is required.

              It should be noted that the CNOPB assumes the role of lead RA for proposed offshore petroleum
              development projects (see also 16-15).


16-10         Determination of Whether a Subsection 5(1) NWPA Formal Approval
              Is Required
              Where development activities constitute “work” and where such work may substantially interfere with
              “navigable waters,” a Formal Approval is required under subsection 5(1) of the Navigable Waters
              Protection Act. The purpose of this Act is to protect the public right of navigation by prohibiting the
              building or placement of any work in, upon, over, through or across navigable waters without approval
              of the Canadian Coast Guard (DFO-CCG).

              Although DFO-CCG has no jurisdiction in the offshore beyond 12 nm, it will review activities to
              ensure they are not a hazard to navigation.50

              It is important to note that the subsection 5(1) of the NWPA does not apply to “companies,” as
              defined by the National Energy Board Act.51 For these companies, approval to construct works in
              navigable water will be granted in accordance with sections 108 and 109 of the National Energy
              Board Act.

              In order to determine whether such an approval is required, the Applicant is advised to meet with the local
              DFO-CCG office to consult on his/her particular project. Pursuant to the Marine Navigation Services
              Navigable Waters Protection Act Application Guide, the following information should be provided to
              DFO-CCG before the meeting:
                   •   Name of applicant, and, if applicable, name of agent, address, phone number and fax
                       number;
                   •   Details of the work, including:
                       −   proposed construction schedule,
                       −   description of work including dimensions,
                       −   status of work (existing, proposed, or both),
                       −   name of waterway where the work is or will be located including width and depth;
                       −   chart and topographic map number,
                       −   latitude and longitude of the work site,

              50
                 DFO-CCG is planning to conduct consultations in 2001 with respect to possible amendments to the
              NWPA. This may result in procedural changes that could impact the regulatory process described here.
              51
                 R.S.C. 1985, c. N-7.


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16 – Fisheries Act and Navigable Waters Protection Act Authorizations


                       −   legal description (section, lot number, concession, county/township, city/town, province,
                           etc.),
                       −   environmental assessment documents if available,
                       −   identification of upland property owners,
                       −   method of construction i.e. equipment to be used, temporary construction that may
                           impact on navigation,
                   •   Waterlot lease/permit;
                       −   Have you obtained a waterlot lease/permit? If so, provide the legal description and
                           dimensions of the lease/ permit area,
                   •   Are you the owner of the upland property facing the work? If not, obtain the upland
                       property owner’s written consent;
                   •   Plans, including:
                       −   drawings (including any detail of adjacent works in relation to proposal),
                       −   the required set of plans as dictated by the NWP officer,
                       −   indicate whether any of these plans have been registered/deposited. If so, indicate the
                           registration/deposit number, and
                       −   identify other government regulatory agencies plans have been submitted to.

               The following three questions must be asked to determine whether a subsection 5(1) NWPA
               Approval is required:
                   •   Is the proposal a “work”?
                   •   Does the work affect “navigable waters”?
                   •   Does the work interfere substantially with navigation?

               The significance of each of these questions is discussed in sections 16-11 through 16-13 below.


16-11          Is the Proposal a Work? If Not, Subsection 5(1) Formal Approval Not
               Required
               “Work” is defined as:
                       (a) any bridge, boom, dam, wharf, dock, pier, tunnel or pipe and the approaches or other
                           works necessary or appurtenant thereto;
                       (b) any dumping of fill or excavation of materials from the bed of a navigable water;
                       (c) any telegraph or power cable or wire; or
                       (d) any structure, device or thing, whether similar in character to anything referred to in this
                           definition or not, that may interfere with navigation (s. 3, NWPA).

               If the proposal is not a “work,” then a subsection 5(1) NWPA Formal Approval is not required
               (16-11-1). If it is a work, the next question must be addressed.




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                                     16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-12         Does the Work Affect Navigable Waters?
              “Navigable water” includes:
                       a canal and any other body of water created or altered as a result of the construction of any
                       work (s. 3, NWPA).

              If the proposal does not affect “navigable waters,” then a subsection 5(1) NWPA Formal Approval
              is not required.


16-13         Does the Work Interfere Substantially with Navigation?
              Pursuant to subsection 5(2) of the NWPA, except in the case of a bridge, boom, dam or causeway,
              an approval is not required where, in the opinion of the Minister, the work does not interfere
              substantially with navigation. In practice, the Minister exercises a fair amount of discretion in
              determining whether a given project is to be dealt with under subsection 5(1) or 5(2) of the Act. If
              the latter is the case, the project is not considered to be obstructing navigable waters and is, therefore,
              offered exemption from the requirement to obtain an approval from DFO-CCG.


16-14         Subsection 5(1) NWPA Formal Approval Required
              Should the DFO-CCG determine that the answer to the above three questions (16-10) is in the
              affirmative, a subsection 5(1) NWPA Formal Approval will be required. At this point DFO-CCG,
              a federal authority under the CEAA, is required to conduct an environmental assessment of the
              project pursuant to the provisions of the CEAA. Please refer to Chapter 15 for the CEAA
              Environmental Assessment process.

              Following this determination, the regulatory procedures are very similar for both the subsection 35(2)
              Fisheries Act Authorization and the subsection 5(1) NWPA Formal Approval and may be examined
              together.


16-14-1       Notice of Deposit of Plans/Public Consultation
              To facilitate public involvement in the process, the Applicant is required to deposit plans and a
              description of work that is to be undertaken for at least one month. The deposit should be advertised
              in the Canada Gazette and in two newspapers published in or near the locality where the work is to
              be constructed (ss. 9(2) and (3), NWPA). Comments are invited to address the impact of the plans
              on navigation issues rather than environmental ones. If public concerns are sufficiently great, DFO-
              CCG will take greater steps to seek public participation.


16-15         CEAA Environmental Assessment Process
              As mentioned above in section 16-9, once a subsection 35(2) Fisheries Act Authorization and/or
              subsection 5(1) Formal Approval under NWPA is/are required, the Habitat Management staff of
              DFO is identified as a Responsible Authority under CEAA, and must therefore ensure an
              environmental assessment is carried out (see Chapter 15 for the CEAA Environmental Assessment
              process.)


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16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-15-1        Development of an Acceptable Compensation Strategy
               If it is determined that a Subsection 35(2) Fisheries Act Authorization is required, the Applicant
               must develop an acceptable Compensation Strategy, which is considered mitigation under the CEAA
               review. As such, the CEAA review is not considered complete until an acceptable Compensation
               Strategy is in place.

               If the decision of the Habitat Management staff is that a HADD may be adequately compensated, a
               subsection 35(2) Fisheries Act Authorization is drafted, outlining the list of terms and conditions of
               operations. The Compensation Strategy is drafted in accordance with DFO’s policy for the
               Management of Fish Habitat and the ‘No Net Loss’ guiding principle.

               When compensation is required to achieve ‘No Net Loss’, the Hierarchy of Compensation Options
               should be followed. For each step in the hierarchy, with the exception of step four; compensation
               should be completed on site before moving off-site. The Hierarchy of Compensation Options in as
               follows:
                   1. Create or increase the productive capacity of like-for-like habitat within the same ecological
                      unit;
                   2. Create or increase the productive capacity of unlike habitat in the same ecological unit;
                   3. Create or increase the productive capacity of habitat in a different ecological unit;
                   4. Other measures may be considered in exceptional circumstances.


16-16          Decision by CEAA Responsible Authority
               For the purposes of an environmental assessment made pursuant to the CEAA, the Act defines the
               term “mitigation” to include both mitigation and compensation, as defined by DFO’s Policy for the
               Management of Fish Habitat. In general, where it has been determined that a potential HADD can
               be mitigated and/or compensated to achieve No Net Loss, it would also be concluded that impacts to
               fish habitat are not considered significant pursuant to CEAA. If this is the case, a subsection 35(2)
               Authorization may be issued with appropriate conditions


16-17 & 16-18 Compensation Plan Developed if Compensation is a Viable Option
               Following the environmental assessment under CEAA, the Habitat Management staff may either take
               action to allow the proposal to proceed or to stop the process. After completion of the CEAA process
               and acceptance of a Compensation Strategy, DFO requires the Applicant to develop a
               Compensation Plan. It is not until this point that DFO has the necessary information from the
               Applicant to determine if the technical feasibility of the proposed compensation works such that it can
               be considered a viable option to ensure the No Net Loss of fish habitat. If the proposal is allowed to
               proceed, either a subsection 35(2) Fisheries Act Authorization or a subsection 5(1) Formal Approval
               will be issued.




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                                    16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-19         Subsection 35(2) Fisheries Act Authorization Issued and
              Compensation Plan Finalized
              When a subsection 35(2) Fisheries Act Authorization is issued, mitigation measures and terms and
              conditions specific to the project are included. Based upon the information contained within the
              accepted Compensation Plan, a Compensation Agreement between DFO and the Proponent is
              developed. This document comprises a legally binding contractual arrangement between both parties,
              and may be included as a condition of the Fisheries Act Authorization. The preferred instrument of
              obtaining financial security for this agreement, as outlined in the National Practitioners Guide to
              Compensation, is through “Letters of Credit.”
              The Compensation Agreement52 must specify precise terms and conditions and be signed by the
              Applicant and the Habitat Management staff, as well as the appropriate provincial authority, where
              required, or agreed upon when built into the Authorization.
              The components of the Compensation Plan must clearly specify the following:
                   •   type of project;
                   •   type, location and extent of habitat to be affected and compensated;
                   •   type, location and extent of compensatory habitat;
                   •   form of compensation;
                   •   start and completion dates for the work;
                   •   results to be achieved;
                   •   follow-up and monitoring required;
                   •   how success will be evaluated;
                   •   measures to be taken if success is not achieved;
                   •   nature of financial security required (typically a performance bond, a bank letter of guarantee
                       or a guaranteed letter of credit. This security does not, however, protect the Applicant from
                       prosecution for violation of any provision of the FA);
                   •   Applicant’s liability;
                   •   mailing address of both parties; and
                   •   method for effecting notices.

              DFO has an obligation to ensure that compliance monitoring and environmental effects monitoring
              are undertaken. These requirements are usually included as conditions of the Fisheries Act
              Authorization and associated Compensation Plan or Compensation Agreement.


16-20         Subsection 5(1) Navigable Waters Protection Act Formal Approval
              Issued
              When a subsection 5(1) NWPA Formal Approval is issued, the Minister may set terms and
              conditions with respect to the work to be performed (s. 5(a)). Following the issuance of the Approval,
              construction of the work must be commenced within six months and completed within three years
              (s. 5(1)(b)). If these timelines are not met, application may be made to the Minister for extensions
              (s. 5(1)(b)).



              52
                See Fisheries and Oceans Canada, “Habitat Conservation and Protection Guidelines Developed from the
              Policy for the Management of Fish Habitat (1986),” 1998 2nd ed. (Ottawa: DFO, 1998) at p. 16-18.


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16 – Fisheries Act and Navigable Waters Protection Act Authorizations


16-21          Ongoing Obligations
               The Habitat Management staff of DFO and DFO-CCG perform follow-up checks to ensure the
               conditions of the subsection 35(2) Fisheries Act Authorization and the subsection 5(1) NWPA
               Formal Approval have been fulfilled.




16-14                                         Newfoundland and Labrador Offshore Guide – January 2004
                                                                      17 – CEPA, 1999 Disposal at Sea Permit



              17.0 CEPA, 1999 DISPOSAL AT SEA PERMIT

              Chapter 17 describes the steps followed in the issuance of a Disposal at Sea Permit. Chart 17
              illustrates these procedures.

              A Disposal at Sea Permit may be issued by the federal Minister of the Environment through
              Environment Canada’s Environmental Protection Branch, under subsection 127(1) of the Canadian
              Environmental Protection Act, 1999. For a description of Environment Canada’s mandate in the
              Newfoundland and Labrador Offshore Area, please consult Appendix A of this Guide. Appendix A
              also contains an overview of the legislation administered by Environment Canada.

              “Disposal” is defined by the Act as:
                      (a) the deliberate disposal of a substance at sea from a ship, an aircraft, a platform or
                          another structure;
                      (b) the deliberate disposal of dredged material into the sea from any source not mentioned in
                          paragraph (a);
                      (c) the storage on the seabed, in the subsoil of the seabed or on the ice in any area of the sea
                          of a substance that comes from a ship, an aircraft, a platform or another structure,
                      (d) the disposal of a substance by placing it on the ice in an area of the sea;
                      (e) the deliberate disposal at sea of a ship or aircraft; and
                      (f) the deliberate disposal or abandonment at sea of a platform or another structure.

                      but does not include

                      (g) a disposal that is incidental to or derived from the normal operations of a ship, an
                          aircraft, a platform or another structure or of any equipment on a ship, an aircraft, a
                          platform or another structure, other than the disposal of substances from a ship, an
                          aircraft, a platform or another structure operated for the purpose of disposing of such
                          substances at sea;
                      (h) the placement of a substance for a purpose other than its mere disposal if the placement
                          is not contrary to the purposes of this Division and the aims of the Convention [on the
                          Prevention of Marine Pollution by Dumping of Wastes and Other Matter, signed by
                          Canada on December 29, 1972] or the Protocol [to the Convention on the Prevention
                          of Marine Pollution by Dumping of Wastes and Other Matter, 1972, signed in 1996];
                      (i) the abandonment of any matter, such as a cable, pipeline or research device, placed on
                          the seabed or in the subsoil of the seabed for a purpose other than its mere disposal; or
                      (j) a discharge or storage directly arising from, or directly related to, the exploration for,
                          exploitation of and associated off-shore processing of seabed mineral resources
                          (s. 122(1), CEPA, 1999).

              It should be noted that the exemption found in paragraph 122 (1)(j) of CEPA, 1999 applies
              specifically to the offshore industry. Discharge and storage activities during the exploration and
              development phases are exempted provided that they are directly linked to the exploration or
              exploitation phases of a development. This exemption limits Disposal at Sea considerations to a few
              specific activities.




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17 – CEPA, 1999 Disposal at Sea Permit




17-2                                     Newfoundland and Labrador Offshore Guide – January 2004
                                                                         17 – CEPA, 1999 Disposal at Sea Permit


               Schedule 5 of CEPA, 1999 lists six substances that may be considered for disposal at sea:
                   •    dredged material;
                   •    fish waste and other organic matter resulting from industrial fish processing operations;
                   •    ships, aircraft, platforms or other structures from which all material that can create floating
                        debris or other marine pollution has been removed to the maximum extent possible if, in the
                        case of disposal, those substances would not pose a serious obstacle to fishing or navigation
                        after being disposed of;
                   •    inert, inorganic geological matter;
                   •    uncontaminated organic matter of natural origin; and
                   •    bulky substances that are primarily composed of iron, steel, concrete or other similar matter
                        that does not have a significantly adverse effect, other than a physical effect on the sea or the
                        seabed, if those substances:
                        −    are in locations at which the disposal or incineration at sea is the only practicable
                             manner of disposing of or thermally destroying the substances; and
                        −    in the case of disposal, would not pose a serious obstacle to fishing or navigation after
                             being disposed of.

               The first and third materials — dredged materials and platforms — are most relevant to offshore oil
               and gas exploration and development. Activities most likely to require a Disposal at Sea Permit
               include the dredging and/or relocation of seabed sediments and the disposal or abandonment of
               platforms or other structures at sea.

               This chapter is only a summary of the various requirements. Applicants are advised to refer to official
               Environment Canada publications and the relevant legislation and to consult directly with EC staff
               themselves to ensure they have satisfied all necessary requirements. Additional information on the
               Disposal at Sea Program can be found at www.ec.gc.ca/seadisposal/main/index_e.htm.


17-1           Application to Minister of the Environment
               The Operator must apply to the federal Minister of the Environment for a Permit authorizing the
               loading for disposal and disposal of waste or other matter (s. 127(1), CEPA, 1999).


17-2           Components of the Application
               An application for a Disposal at Sea Permit must:
                        (a) be in the prescribed form;
                        (b) contain the information that may be prescribed or that may be required by the Minister
                            for the purpose of complying with Schedule 6 of CEPA, 1999;
                        (c) be accompanied by the prescribed fees (a non-refundable application of $2,500); and
                        (d) be accompanied by evidence that notice of the application was published in a newspaper
                            circulating in the vicinity of the loading or disposal described in the application or in any
                            other publication specified by the Minister (s. 127(2), CEPA, 1999).

               Schedule 6 of CEPA requires a detailed description and characterization of the material proposed for
               disposal at sea as an essential precondition to the consideration of alternatives to disposal and as the




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17 – CEPA, 1999 Disposal at Sea Permit


              basis for a decision to issue a Permit (s. 7, Schedule 6, CEPA, 1999). Characterization of the waste
              or other matter and their constituents shall take into account:
                       (a)         origin, total amount, form and average composition;
                       (b)         properties: physical, chemical, biochemical and biological;
                       (c)         toxicity;
                       (d)         persistence: physical, chemical, biological; and
                       (e)         accumulation and biotransformation in biological materials or sediments.

              Section 4 of the Disposal at Sea Regulations (SOR/2001-275) establishes screening limits for
              contaminants found in dredged material. Section 5 identifies the biological tests required to further
              characterize dredged material with contaminant levels exceeding the screening criteria.

              Following characterization, the acceptability of a material for disposal at sea must be demonstrated
              through an analysis of alternatives to disposal such as re-use, re-cycling, and treatment. As noted
              above, contaminants found in dredged material passing screening criteria are likely to be of little
              environmental concern and unconfined or open-water disposal is generally an acceptable option. For
              platforms, assessing alternatives to disposal shall involve a comparative assessment. A Permit shall be
              refused if opportunities exist to re-use or recycle without undue risk to human health or the
              environment or disproportionate costs. If disposal is the preferred option then a more detailed
              comparative assessment is required for each disposal option, land-based and disposal at sea. In
              addition to the previously mentioned factors, the comparative assessment for disposal options must
              consider hazards (including accidents) and exclusion of future uses.

              Information required to select a disposal site must include:
                       (a) physical, chemical and biological characteristics of the water-column and the sea-bed;
                       (b) location of amenities, values and other uses of the sea in the area under consideration;
                       (c) assessment of the constituent fluxes associated with disposal in relation to existing fluxes
                           of substances in the marine environment; and
                       (d) economic and operational feasibility (s. 11, Schedule 6, CEPA, 1999).

              The assessment of potential effects of a disposal at sea activity shall lead to a concise statement of the
              expected consequences of the sea or land disposal options. It provides a basis for deciding whether to
              approve or reject the proposed disposal option and for defining environmental monitoring
              requirements.

              In addition to the application fee, it is important to note that a monitoring fee is applied to all
              Disposal at Sea permitted dredging projects. However, monitoring will only be conducted at some
              representative sites. Monitoring is necessary to verify decisions made when granting permits, to protect
              the marine environment and to meet national and international treaty requirements. The monitoring is
              carried out under the direction of EC personnel. Stakeholders are consulted on a regular basis to
              assist in site selection and monitoring goals. This fee of $470 per 1,000 cubic metres of dredged or
              excavated material to be disposed of at sea, may be paid in full prior to permit publication in the
              Canada Gazette or in two equal installments; the first prior to publication and the second at the mid
              point of the Permit terms.

              The time required to review an application and issue a Disposal at Sea Permit will vary with the
              complexity of the project and the amount of information provided. There is also a period of five weeks set
              aside for Canada Gazette formatting and publication and a public comment period. Additional time may


17-4                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                                             17 – CEPA, 1999 Disposal at Sea Permit


               be needed for gathering supplemental information and consulting with other agencies. To reduce the
               possibility of a delay, it is be advisable to apply for a Permit at least three months prior to the desired
               starting date. For more complex projects, the lead time should be increased to six months or more.


17-3           Permit Review and Consultation with Other Government
               Departments
               Participants in the review process include the Department of Fisheries and Oceans and at least one
               provincial agency. For more complex projects other departments may be asked to participate.
               Aboriginal organizations are provided with notices of permit applications and opportunities to
               comment.

               The time required to review an application and issue a Disposal at Sea Permit will vary with the
               status of the related environmental assessment (see 17-4 below), the manner in which disposal at sea
               was addressed in the related environmental assessment, the complexity of the project, and the quality
               of information provided. Table 1 provides the sequence of steps involved in the Disposal at Sea
               Permit application review process and an example of timelines.

               Table 1. Example of Permit Review and Consultation Timelines

                1 to 3 days             Environment Canada conducts an initial review of permit application to ensure
                                        completeness.
                1 to 2 months           Environment Canada distributes the application to the Regional Ocean Disposal
                                        Advisory Committee for technical review.
                                             •    Further information may be requested.
                                             •    Completed review forms the basis of a decision on the Permit.
                3-7 days                Environment Canada makes a preliminary decision on issuing a Permit. The Permit is
                                        drafted and, if applicable, payment of the monitoring fee is verified. If the application is
                                        rejected, the applicant must find alternative to disposal at sea and any monitoring fee paid
                                        is refunded.
                7 days                  Environment Canada submits the draft Permit to the Canada Gazette for publishing at
                                        least one week in advance of publication date.
                30 days                 Permit is published in the Canada Gazette and the 30 day response period begins. A
                                        copy of the published Permit is made available on the CEPA Registry.
                Term of Permit               •    Carry out loading, disposal, and monitoring activities in accordance with
                (maximum of one                   conditions.
                year)
                                             •    Environment Canada, CEPA Enforcement Officer inspects loading and
                                                  disposal operations (representative number of disposal operations are inspected).
                                             •    Report as required in the Permit.
                                             •    If time beyond one year is required, a new Permit application must be
                                                  submitted.
                End of the Permit       The Permittee files a final report with Environment Canada within 30 days of either the
                or completion of        completion of disposal operations or the expiry of the Permit, whichever comes first.
                operations
                Post Permit             Environment Canada conducts monitoring at representative sites.



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 17 – CEPA, 1999 Disposal at Sea Permit


17-4           Environmental Assessment under CEAA Triggered
               (See CEAA Chart 15 for Environmental Assessment Process)
               The Permit application review and the review of any request for a Permit amendment takes place
               under the provisions of CEPA, 1999 and CEAA.53 As a Responsible Authority under CEAA, EC
               consults with other government departments having regulatory roles or pertinent expertise. EC takes a
               lead or supporting role in the environmental assessment, depending on whether or not other
               Responsible Authorities (RAs) are involved. In the case of large-scale projects, a single
               environmental assessment is generally designed to satisfy the environmental assessment obligations of
               several departments, including EC if a Disposal at Sea Permit is required. As a result, the
               environmental assessment requirements may be met prior to formal application for a Permit.

               The type of environmental assessment to be conducted under CEAA varies depending on the nature
               of the disposal. However, in general, most assessments are carried out by way of Screenings instead of
               Comprehensive Studies or Panel Review. For more details on the CEAA environmental process, see
               Chapter 15 of this Guide.


17-5           Preliminary Decision by Minister to Issue/Refuse Permit
               The initial stages in assessing alternatives to disposal at sea shall, as appropriate, include an
               evaluation of:
                        (a) the types, amounts and relative hazard of waste or other matter generated;
                        (b) the details of the production process and sources of waste or other matter within that
                            process; and
                        (c) the feasibility of the following waste reduction or prevention techniques:
                            (i)       production reformulation,
                            (ii)      clean production technologies,
                            (iii)     process modification,
                            (iv)      input substitution, and
                            (v)       on-site, closed loop recycling (s. 2, Schedule 6, CEPA, 1999).

               In general, if the assessment of the above factors reveals that opportunities exist for waste prevention at
               source, the Applicant shall formulate and implement a waste prevention strategy, in collaboration with
               relevant local and national agencies. The waste prevention strategy would include specific waste
               reduction targets and provision for further waste prevention audits to ensure that these targets are
               being met. Permit issuance or renewal shall be subject to compliance with this requirement (s. 3,
               Schedule 6, CEPA, 1999).

               53
                  The regulatory process is one of self-assessment, whereby a permit Applicant conducts an assessment of the
               environmental effects of a proposed activity, including the assessment of alternatives, and submits the results to
               Environment Canada for review. Because an environmental assessment of Disposal at Sea activities under the
               Canadian Environmental Assessment Act must precede the issuing of a Disposal at Sea Permit, the results of
               the environmental assessment will be used to the extent appropriate to inform the regulatory process. To ensure
               timeliness and efficiency, Environment Canada promotes the integration of the environmental assessment and
               the Disposal at Sea regulatory processes. It is common for the two processes to rely on the same information and
               run concurrently. In the case of larger scale projects, the environmental assessment precedes the regulatory
               process. As such, close attention to Disposal at Sea issues during an environmental assessment can greatly
               simplify the subsequent regulatory process.



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                                                                        17 – CEPA, 1999 Disposal at Sea Permit


              A detailed description and characterization of the waste or other matter is an essential condition
              precedent to the consideration of alternatives and the basis for a decision as to whether the waste or
              other matter may be disposed of at sea (s. 7, Schedule 6, CEPA, 1999). Characterization of the
              waste or other matter and their constituents shall take into account:
                       (a)     origin, total amount, form and average composition;
                       (b)     properties: physical, chemical, biochemical and biological;
                       (c)     toxicity;
                       (d)     persistence: physical, chemical, biological; and
                       (e)     accumulation and biotransformation in biological materials or sediments.

              A National Action List provides a mechanism for screening candidate waste or other matter and their
              constituents on the basis of their effects on human health, and on the marine environment. In selecting
              substances for consideration in the Action List, priority is given to toxic, persistent and bio-
              accumulative substances from human sources, including petroleum hydrocarbons (s. 9, Schedule 6,
              CEPA, 1999).

              Application of the Action List results in categories of waste or other matter:
                       (a) waste or other matter that contain specified substances, or which cause biological
                           responses, exceeding the relevant upper levels shall not be disposed of at sea, unless
                           made acceptable for disposal through the use of management techniques or processes;
                       (b) waste or other matter that contain specified substances, or which cause biological
                           responses, below the relevant lower levels should be considered to be of little
                           environmental concern in relation to disposal at sea; and
                       (c) waste or other matter that contain specified substances, or which cause biological
                           responses, below the upper levels but above the lower levels require more detailed
                           assessment before their suitability for disposal can be determined (s. 10, Schedule 6,
                           CEPA, 1999).

              Disposal site
              Information required to select a disposal site must include:
                       (a) physical, chemical and biological characteristics of the water-column and the sea-bed;
                       (b) location of amenities, values and other uses of the sea in the area under consideration;
                       (c) assessment of the constituent fluxes associated with disposal in relation to existing fluxes
                           of substances in the marine environment; and
                       (d) economic and operational feasibility (s. 11, Schedule 6, CEPA, 1999).

              Waste Management
              Applications to dispose of waste or other matter shall demonstrate that appropriate consideration has
              been given to the following hierarchy of waste management options, which implies an order of
              increasing environmental impact:
                       (a)   re-use;
                       (b)   off-site recycling;
                       (c)   destruction of hazardous constituents;
                       (d)   treatment to reduce or remove the hazardous constituents; and
                       (e)   disposal on land, into the air and in water (s. 5, Schedule 6, CEPA, 1999).




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 17 – CEPA, 1999 Disposal at Sea Permit


               A Permit to dispose of waste or other matter shall be refused if opportunities exist to re-use, recycle or
               treat the waste or other matter without undue risks to human health or the environment or
               disproportionate costs. The practical availability of other means of disposal shall be considered in the
               light of a comparative risk assessment involving both disposal and the alternatives (s. 6, Schedule 6,
               CEPA, 1999).

               Assessment of potential effects shall lead to a concise statement of the expected consequences of the
               sea or land disposal options (i.e. the Impact Hypothesis). It provides a basis for deciding whether to
               approve or reject the proposed disposal option and for defining environmental monitoring
               requirements (s. 12, Schedule 6, CEPA, 1999).

               An analysis of each disposal option shall be considered in light of a comparative assessment of the
               following concerns:
                   •    human health risks;
                   •    environmental costs;
                   •    hazards (including accidents);
                   •    economics; and
                   •    exclusion of future uses.

               Before issuing a Permit, the Minister will review all factors that he/she considers necessary, including
               public comment. If the Minister’s assessment of all factors reveals that adequate information is not
               available to determine the likely effects of the proposed disposal option, this option shall not be
               considered further. In addition, if the interpretation of the comparative assessment shows the disposal
               option to be less preferable, a Disposal at Sea Permit shall not be issued (s. 14, Schedule 6, CEPA,
               1999).

               If the Minister’s assessment of the above factors finds that a Disposal at Sea Permit is appropriate
               given the circumstances and information provided, the Minister will issue a provisional Disposal at
               Sea Permit. This issuance is conditional on the results of the 30-day public review of the proposed
               Disposal at Sea.


17-6           Publication of Permit in Canada Gazette
               Following the preliminary decision of the Minister, the proposed terms and conditions of the Permit
               are published in the Canada Gazette. Within the 30 day response period that follows publication,
               any person may file a notice of objection to the issuing of a Permit with the Minister of the
               Environment. The Minister may establish a Board of Review to inquire into the matter raised by the
               notice. The start date of the Permit must follow the 30 day response period.


17-7 & 17-8 Final Decision by Minister to Issue/Refuse Permit
               Following the 30-day public review period, the Minister will make a final decision to grant or refuse
               the Disposal at Sea Permit.




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                                                                         17 – CEPA, 1999 Disposal at Sea Permit


17-9           Disposal at Sea Permit Issued with Conditions and Duration
               Each Disposal at Sea Permit issued will contain information specifying:
                   •    the types and sources of materials to be disposed of;
                   •    the location of the disposal site;
                   •    the method of disposal; and
                   •    monitoring and reporting requirements (s. 17, Schedule 6, CEPA, 1999).

               A Disposal at Sea Permit will also contain any conditions that the Minister considers necessary for
               the protection of marine life, any legitimate uses of the sea or human life, including conditions relating
               to the following:
                   •    the nature and quantity of the substance for loading, disposal or incineration;
                   •    the method and frequency of the disposal or incineration authorized including, if necessary,
                        the date or dates on which disposal or incineration is authorized;
                   •    the manner of loading and stowing the substance authorized for disposal or incineration;
                   •    the site at which disposal or incineration may take place;
                   •    the route to be followed by the ship or aircraft transporting the substance to the disposal or
                        incineration site;
                   •    any special precautions to be taken respecting the loading, transporting, disposal or
                        incineration of the substance; and
                   •    the monitoring of the disposal, the incineration and the disposal site to determine the effects
                        of the disposal on the environment and human life (s. 129(1), CEPA, 1999).

               A Disposal at Sea Permit will be valid for a particular date or dates or for a particular period to the
               maximum of one year (s. 129(2), CEPA, 1999).


17-10          Monitoring and Reporting Requirements
               After a Disposal at Sea Permit is issued by the Minister, the Applicant must submit to two forms of
               monitoring:
                   •    short-term monitoring conducted by the permittee during or immediately following the
                        disposal; and
                   •    long-term monitoring of disposal site conditions conducted by EC and funded through the
                        collection of monitoring fees (as mentioned above).

               Monitoring is conducted at selected representative sites and is necessary to verify that Permit
               conditions were met and that the assumptions used during Permit review and site selection process
               were correct and sufficient to protect human health and the environment.

               If the results of the monitoring prove negative or if the monitoring is carried out in an inadequate
               manner, the Minister may revoke the Disposal at Sea Permit.




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17 – CEPA, 1999 Disposal at Sea Permit



Notes




17-10                                    Newfoundland and Labrador Offshore Guide – January 2004
                                                                           18 – Transboundary Pipeline Approvals



               18.0 Transboundary Pipeline Approvals

               Chapter 18 describes the steps for regulatory approvals required to construct a Transboundary
               Pipeline in the Nova Scotia offshore area. Chart 18 illustrates these procedures.

               The NEB has overall regulatory responsibility for pipelines that originate within the offshore area and
               cross jurisdictional boundaries. Proposed pipelines greater than 40 km in length would be subject to
               section 52 of the National Energy Board Act, while those 40 km or less would be subject to section
               58 of the NEB Act. Whether a proposed pipeline is subject to section 52 or section 58 of the NEB
               Act will determine the NEB review process. For a description of the NEB’s mandate, please consult
               Appendix A of this Guide. It is important to note that subsea pipelines within the offshore area are not
               within the NEB’s mandate as they are the responsibility of the CNOPB.

               In general, applications made for a Certificate of Public Convenience and Necessity pursuant to
               section 52 of the NEB Act require a NEB hearing and Governor in Council (GIC) approval.
               Applications for an Order pursuant to section 58 of the NEB Act usually do not require an NEB
               hearing and do not require GIC approval, but otherwise are subject to similar steps and principles of
               review as for a section 52 pipeline, with due regard for the scope and nature of the proposed project.

               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               official documents of the NEB themselves to ensure they have satisfied all necessary requirements.


18-1           Community Consultation by Applicant
               Applicants for pipeline construction are required to consult directly with potentially affected interests,
               communities and landowners to explain the project, and its potential environmental and socio-
               economic effects, and to allow an opportunity for public comment prior to making formal application
               for a Certificate of Public Convenience and Necessity.

               Consultation as early as possible in the project planning and design stages is advisable. The
               requirement for meaningful and comprehensive consultation is spelled out in the NEB’s “Guidelines
               for Filing Requirements.” Potentially affected interests should be involved for the entire development
               from pre-planning to post-construction. Consultation may include a range of initiatives, such as:
               community visits and input, audio-visual presentations, discussion papers, news releases brochures,
               open houses, meetings, site tours, workshops and advisory groups.

               Maintaining a good record of consultation efforts and results is necessary. This record can include the
               date, location and nature of meetings or more formal consultation(s), concerns and issues raised,
               attendees, and the principle items discussed. It is also important to identify any resolutions reached,
               and, in particular, to identify how the development proposal was changed or altered to address
               concerns.




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18 – Transboundary Pipeline Approvals




18-2                                    Newfoundland and Labrador Offshore Guide – January 2004
                                                                         18 – Transboundary Pipeline Approvals


18-2 to 18-4   Application for Certificate of Public Convenience and Necessity or
               Preliminary Submission
               Applying to the NEB for a Certificate of Public Convenience and Necessity under the NEB Act is
               the first stage in pursuing transboundary pipeline project approval.

               The NEB examines the application. If the application is incomplete, the NEB will either return the
               application as delinquent or request supplemental information from the Applicant. The Applicant
               can then file the additional information.

               A date for a public pipeline hearing may be set by the NEB at this time.


18-5           Environmental Assessment Track Determined
               Both section 52 and section 58 applications under the NEB Act are triggers under the CEAA, and
               the NEB is a federal Responsible Authority under that legislation. A proposed offshore pipeline
               would be subject to a CEAA environmental assessment process. The CEAA Comprehensive Study
               List Regulations (CSL) prescribe a subsea pipeline as a project for which a Comprehensive Study is
               required.

               Public participation in Comprehensive Studies is mandatory during the scoping of the study
               (s. 21(1), CEAA), during the conduct of the study (s. 21.2, CEAA) and after the Comprehensive
               Study Report has been completed when the Canadian Environmental Assessment Agency invites the
               public to review and comment on the report (s. 22(1), CEAA). Public participation undertaken to
               comply with sections 21(2) and 21.2 of the CEAA may take the form of public meetings, open
               houses, advisory committees, workshops, community liaison office and site visits.

               Section 21(2) of the CEAA requires the Responsible Authority to prepare a report to the Minister
               regarding the scope of the review, public concerns, potential for adverse environmental effects and the
               ability of the Comprehensive Study to address issues related to the project. The report must also
               recommend to the Minister to either continue with the Comprehensive Study, or refer the project to a
               Mediator or Review Panel in accordance with section 29. After considering the report, the Minister
               must then either refer the project to a Mediator or Review Panel, or refer it back to the Responsible
               Authority to complete the Comprehensive Study (after which it cannot be referred to a Mediator or
               Review Panel.)

               For a more detailed description of requirements under CEAA, refer to Chapter 15.


18-6           Comprehensive Study Process and Report
               As RA, the NEB may accept the Proponent’s environmental impact statement as the basis of the
               Comprehensive Study and may circulate it to other regulatory authorities for review and to the public.
               The NEB is responsible for conducting the Comprehensive Study and Comprehensive Study
               Report.

               After the Responsible Authority completes the Comprehensive Study, it must provide a
               Comprehensive Study Report (CSR) to the Minister of Environment and the Canadian



 Newfoundland and Labrador Offshore Guide – January 2004                                                         18-3
 18 – Transboundary Pipeline Approvals


               Environmental Assessment Agency (s. 21.1(1)(a) CEAA). After a public comment period, the
               Minister makes a decision as to whether the project is or is not likely to cause significant adverse
               environmental effects, and sets out any mitigation measures or follow-up program that the Minister
               considers appropriate. Before issuing the decision statement, the Minister may request additional
               information from the Responsible Authority or expert federal authority for the project, or may request
               additional actions to address public concerns.

               If significant effects are not likely, the RA may exercise any power or perform any duty or function
               that would permit the project to be carried out in whole or in part. If significant effects are likely, the
               RA may not exercise any power or perform any duty or function that would permit the project to be
               carried out in whole or in part, without the approval of the Governor in Council (s. 37, CEAA).


18-7 & 18-8 NEB Regulatory Hearing — (Joint) Panel Review
               The NEB must, pursuant to the NEB Act, hold a public hearing for all section 52 applications.
               Although not typically done, the NEB may, at its discretion, hold a public hearing for a section 58
               application. The public hearing is a quasi-judicial process which provides all parties with the
               opportunity to pursue issues of interest, submit evidence and present views to the NEB. A wide range
               of matters are typically considered during a public hearing, including: environmental aspects, socio-
               economic practices, project economics and finances, the supply and demand for hydrocarbons, and
               the safety and integrity of the proposed facilities.

               The pipeline hearing may, however, be coordinated (as a joint Panel Review) with public hearing
               requirements under the CEAA and the C-NAAIA, for purposes of environmental assessment. (See
               Chapter 15 of this Guide for more details on the CEAA Joint Panel Review process). A Joint Panel
               would likely use many aspects of the NEB hearing process.

               Notices are placed in the appropriate newspapers announcing the time and place of the hearing, as
               well as explaining how the public can intervene before the NEB (or a joint Panel) to express
               concerns.

               At the beginning of a public hearing process, the NEB issues a Hearing Order (HO). The HO lays
               out the schedule of events including the dates, times and locations of the hearing, instructions to
               interested persons on how and when to participate and, where appropriate, a preliminary list of issues
               identifying the specific subject matter to be examined at a hearing. The HO complements the NEB’s
               “Rules of Practice and Procedures 1995,” which sets out the procedural requirements under which
               the NEB operates.


18-9 to 18-11 Panel Recommendations
               The Responsible Authorities are required to respond to any recommendations made by the Review
               Panel in its report, with the approval of the Governor in Council (GIC). GIC may require the
               Review Panel to clarify any of the recommendations made in its report.




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                                                                           18 – Transboundary Pipeline Approvals


18-12 to 18-14 Decision Resulting from Environmental Assessment
               Following the environmental assessment, the NEB would make its CEAA determination with respect
               to the significance of the potential environmental effects of the proposed project, prior to making its
               regulatory decision under the NEB Act.

               As a result of the environmental assessment process, the application will either be rejected or
               recommended to go through the regulatory process.


18-15 to 18-18 Governor In Council Approval/Certificate of Public Convenience and
               Necessity Approval
               If the NEB approves the application, including the proposed general route, this recommendation is
               forwarded to the Governor in Council for approval. Even though a general route is approved, it may
               be further revised within the study area during the second stage, the determination of the detailed
               route.

               The Certificate of Public Convenience and Necessity can be issued by the NEB upon approval by
               the Governor in Council. As well, the NEB may attach conditions to its approval, requiring
               companies to undertake specified measures (such as follow-up and monitoring) to resolve concerns of
               interested parties, either before, during or after the construction process.

               For pipelines under 40 km in length, the NEB issues an Order under section 58 of the NEB Act.
               Issuance of a section 58 Order does not require Governor in Council approval.


18-19 & 18-20 Applicant Files Plans, Profiles and Books of Reference
               Section 33 of the NEB Act requires that the Applicant file a series of site specific plans, referred to
               as Plans, Profiles and Books of Reference (PPBOR) following project approval and prior to
               construction. These detail the precise location of the pipeline, specify the land that will be crossed, the
               type of land rights that will be required by the company, and the landowners and occupiers who
               would be affected. Once the PPBORs have been filed, the Applicant must serve notices on all
               landowners whose lands or land rights are required for the pipeline in accordance with paragraph
                34 (1)(a) of the NEB Act. The Applicant must also place a public notice in at least one issue of a
               newspaper that is circulated in the affected areas as required by paragraph 34(1)(b) of the NEB Act.
               The public notice must include a detailed description of the proposed route, along with the procedure
               people must follow to present any objections to the NEB.

               Landowners and other persons who anticipate that their lands may be affected and who oppose the
               proposed route may file a written statement with the NEB explaining their interest and the grounds
               for their opposition. If no objections to the detailed route are received, the NEB may approve the
               PPBORs and further public hearings are not required. If an objection is received, a public hearing,
               termed a Detailed Route Hearing, must be held in the local area. Strict time lines apply for
               notification and filing of objections. Applicants should contact the NEB for more information.




 Newfoundland and Labrador Offshore Guide – January 2004                                                            18-5
 18 – Transboundary Pipeline Approvals


18-21 & 18-22 NEB Determines if Detailed Route Hearing Required
               If no objections to the detailed route are received, the NEB may approve the PPBOR and is not
               required to hold a public hearing. If an objection is received, a public hearing must be held locally.
               While the NEB seriously considers all relevant statements, it has the authority and obligation to
               disregard statements that are considered frivolous or vexatious.

               Intervenors at the Detailed Route Hearing have the opportunity to cross-examine the Applicant’s
               witnesses and to present their own evidence concerning the best possible route for the pipeline and the
               most appropriate methods and timing of construction.


18-23 & 18-24 NEB Decision on PPBORs
               After reviewing all the evidence, the NEB decides whether to approve the Applicant’s PPBORs. It
               can also issue approval with conditions. If all or part of the route is rejected, the Applicant must
               submit a revised plan. The process of determining whether the detailed route is may be repeated for
               those areas where changes are made.


18-25 to 18-27 Application for Leave to Open
               Once construction and the required testing of the pipeline are completed, the Proponent may apply to
               the NEB for Leave to Open the pipeline for transmission of hydrocarbons under section 47 of the
               NEB Act. The NEB will issue Leave if it is satisfied that the pipeline may be safely opened for
               transmission.




 18-6                                             Newfoundland and Labrador Offshore Guide – January 2004
                                                             19 – Domestic Vessel Inspection and Certification



               19.0 DOMESTIC VESSEL INSPECTION AND CERTIFICATION

               Chapter 19 describes the vessel certifications required by Transport Canada - Marine Safety
               (TCMS) and the Board for the various vessels used in the oil and gas industry in the Newfoundland
               and Labrador Offshore Area. Chart 19 illustrates these procedures. For a summary of the TCMS
               mandate in the offshore area, please refer to Appendix A of this Guide.

               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               official documents of TCMS and the CNOPB to ensure that all necessary requirements have been
               satisfied.


19-1 & 19-2 Is the Vessel a Foreign-Registered/Canadian-Registered Non-Duty
            Paid Vessel?
               The first question to be asked is whether the vessel is a Canadian-registered or a duty paid vessel. If it
               is not, the Operator must obtain Foreign Vessel Authorizations, as outlined in Chapter 20 of this
               Guide. If it is, the Domestic Vessel Inspection and Certification processes outlined in the following
               sections apply.


19-3           Is the Vessel to be Inspected by TCMS or the Board?
               The Applicant must contact TCMS, or the Board to conduct an inspection of the vessel, as
               appropriate.

               In the past, some uncertainty had existed with respect to which agency was responsible for inspecting
               the various types of vessels used in offshore oil and gas operations. However, the MOU between
               TCMS and Board signed on December 2001, sets out the inspection responsibilities. Sections 19-4
               and 19-5 below summarize this MOU. These sections provide only a brief overview of the contents of
               the MOU, readers are advised to examine the MOU and to speak to staff of TCMS and the
               CNOPB in order to ensure compliance.


19-4 & 19-4-1 TCMS Inspection & Payment of Fees
               TCMS has the responsibility of inspecting vessels that fall under the following categories: shuttle
               tankers, geotechnical vessels, standby vessels, supply/support/construction vessels, and diving vessels.

               Applicants must provide a minimum of 24 hours notice for inspection, whether the vessel is in
               Canada or abroad. TCMS may inspect a vessel up to 40 days before it is to be used. A Certificate
               will only be issued once TCMS re-inspects the vessel. If the results of the inspection are negative, all
               problems must be rectified before the vessel may be re-inspected.




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19 – Domestic Vessel Inspection and Certification




19-2                                        Newfoundland and Labrador Offshore Guide – January 2004
                                                              19 – Domestic Vessel Inspection and Certification




19-4-2         TCMS Certifies Vessel for Marine Safety
               If the results of the inspection are positive, and the Applicant has paid the fee set out by TCMS’s
               regulations, the vessel will be certified for marine safety. Canadian registered vessels are issued a
               Canadian Safety Inspection Certificate pursuant to the Canada Shipping Act.


19-4-3         For Standby Vessels, TCMS Also Issues a Letter of Compliance
               For Canadian-registered vessels performing standby functions in the Newfoundland and Labrador
               Offshore Area, a Letter of Compliance for Standby from TCMS is also necessary. A Letter of
               Compliance for Standby will be issued upon payment of fees. These fees are based on tonnage, in
               accordance with the Board of Steamship Inspection Scale of Fees.


19-5 & 19-5-1 Board Inspection, Upon Payment of Fees
               The Board is responsible for inspecting all vessels, including: mobile offshore units, storage tankers,
               accommodation vessels, helicopter facilities (which require a Certificate of Fitness), and all other
               “marine installations or structures” (which will also require a Certificate of Fitness).

               Pursuant to paragraph 152(a) of the C-NAAIA, a “marine installation or structure” includes:
                        any ship, offshore drilling unit, production platform, subsea installation, pumping station,
                        living accommodation, storage structure, loading or landing platform…
                        but does not include any vessel that provides any supply or support services to a ship,
                        installation, structure or work.…

               If the results of the inspection are negative, the problems must be rectified before the CNOPB re-
               inspects the vessel.


19-5-2         For a “Marine Installation or Structure,” Certificate of Fitness Must be
               Obtained from Certifying Authority
               Where the vessel is a “marine installation or structure,” as defined above, the Board requires that a
               Certifying Authority inspect and approve the fitness of the vessel by issuing a Certificate of Fitness.
               See Chapter 1 of this Guide for a description of the various Certifying Authorities and a summary of
               the Certificate of Fitness requirements.


19-5-3         Board Approves Vessel for Operational Safety
               If the results of the inspection are positive, the Board will approve the vessel for marine safety
               purposes.




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 19 – Domestic Vessel Inspection and Certification


19-6            Operator May Use Vessel; Must Continue to Comply with TCMS or
                Board Marine Safety Requirements
                Once TCMS or the Board approves the marine safety of the vessel, the Operator may use the vessel,
                provided that he/she complies with TCMS’s or the Board’s safety requirements.


19-7            Ongoing Inspections of Vessel
                Under certain circumstances, TCMS and/or the Board may continue to inspect the vessel while the
                safety certification is in effect, to ensure the marine safety fitness of the vessel.




 19-4                                           Newfoundland and Labrador Offshore Guide – January 2004
                                                                         20 – Foreign Vessel Authorizations



          20.0 FOREIGN VESSEL AUTHORIZATIONS

          Chapter 20 describes the steps for obtaining authorizations for allowing foreign vessels to be used in
          Canadian waters, including the Newfoundland and Labrador Offshore Area. For the purposes of
          this Guide, the term “foreign vessel” is defined as a foreign-registered vessel or a Canadian-registered
          non-duty paid vessel. Chart 20 illustrates these procedures.

          The primary intent of the Coasting Trade Act is to protect the interests of operators of Canadian
          registered ships while allowing access to foreign ships when suitable Canadian registered ships are not
          available. Under the Act, the Minister of National Revenue cannot issue a Coasting Trade Licence
          authorizing a foreign ship or a non-duty paid ship to conduct a commercial activity in Canadian
          waters unless the Canadian Transportation Agency (CTA) has determined that no suitable
          Canadian ship or non-duty paid ship, where applicable, is available to perform the activity described
          in the application. If the Coasting Trade Licence application is for the transportation of passengers,
          the Coasting Trade Act requires the CTA to also determine whether an identical or similar adequate
          marine service is offered.

          Pursuant to subsections 4.(1) and 5 of the Coasting Trade Act,54 and the provisions of the Customs
          and Excise Offshore Application Act,55 the Customs Act56 and the Customs Tariff,57 the Canadian
          Transportation Agency (CTA) and Canada Border Services Agency (CBSA) are responsible for
          administering a temporary admission program for vessels. Transport Canada-Marine Safety
          (TCMS) and the Board also play an important role in the inspection of the foreign vessels for marine
          safety purposes.

          Subject to the CTA’s determination as to whether a Canadian registered ship is suitable and
          available and, for the transportation of passengers, as to whether an identical or similar adequate
          marine service is available from any person operating one or more Canadian ships, CBSA issues the
          Coasting Trade Licence required for the temporary importation of a foreign ship. TCMS is
          responsible for policy issues such as the determination of what activities require a Coasting Trade
          Licence, and for the enforcement of this legislation.

          The temporary importation of a foreign ship to work in Canada also implies abiding by other
          legislation and requirements of other government departs such as Human Resources Development
          Canada and Citizenship and Immigration Canada for working visas for foreign crews.

          For a summary of each agency’s mandate in the offshore, please consult Appendix A of this Guide. A
          separate but relevant procedure for the temporary authorization for foreign workers is set out in
          Chapter 21 of this Guide.




          54
             S.C. 1992, c. 31.
          55
             R.S.C. 1985, c. C-53.
          56
             R.S.C. 1985, c. 1 (2nd Supp.).
          57
             S.C. 1997, c. 36.


Newfoundland and Labrador Offshore Guide – January 2004                                                      20-1
20 – Foreign Vessel Authorizations




20-2                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                                               20 – Foreign Vessel Authorizations


               This chapter is only a summary of the various requirements. Applicants are advised to consult the
               official documents of the CBSA, the CTA, the Board and TCMS themselves to ensure they have
               satisfied all necessary requirements. Specific information about CTA procedures can be found in the
               Canadian Transportation Agency Guidelines Respecting Coasting Trade Licence Applications
               (http://www.cta-otc.gc.ca/marine/coasting-cabotage/guidelines_e.html ).


20-1 & 20-2 Is the Vessel a Foreign-Registered/Canadian-Registered Non-Duty
            Paid Vessel?
               The first question to be asked is whether the vessel is a foreign-registered or a Canadian-registered
               non-duty paid vessel. If it is not, then the authorizations outlined in this chapter are not needed and
               the Operator would go through the processes set out in Chapter 19 of this Guide to obtain the
               necessary Domestic Vessel Certifications. If it is, then the Foreign Vessel Authorizations outlined in
               following sections apply.


20-3           Possible Help from Transport Canada-Marine Safety (TCMS), the
               Board, and CTA to Assist in Planning/Scoping
               Before applying for authorization to use a foreign vessel in Canada, the Operator may ask TCMS
               and the Board for assistance in planning or scoping available vessels. The CTA’s website contains
               information on Canadian vessels, organized by classification.

               Applications of a general and speculative nature are not encouraged in that they normally do not
               provide sufficient information to enable the CTA to determine whether a suitable Canadian registered
               ship is available to offer the service or perform the activity described in the application.

               While applications should be filed with the CTA as early as possible prior to the start of the proposed
               service or activity, the present guidelines provide various minimum time periods for advance notice,
               depending on the nature or urgency of the activity.

               All time periods are in business days and, in all cases, the name of the proposed foreign ship may or
               may not be known.

               30 days:     For non-urgent, long-term services or activities, including, but not limited to, multi-trips
                            or yearly operation. These applications are normally for pre-planned services or activities
                            where specific dates and/or locations are known in advance and include activities related
                            to offshore resource exploration and development, dredging, or passenger services such
                            as sightseeing, cruises or tall ships.

               15 days:     For non-urgent, shorter term services or activities, including, but not limited to, single-
                            trip, isolated or non-repetitive operations, including activities and services such as those
                            described above. The 15-day notice is normally for pre-planned services or activities
                            where dates and location are known in advance.

               8 days:      For the operation of oil tankers only.




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 20 – Foreign Vessel Authorizations


                Fast Track: This process only applies to urgent services or activities that cannot be accommodated
                            under any of the above notices. Among others, it includes emergency situations other
                            than those covered under section 3 of the Coasting Trade Act and other circumstances
                            beyond the control of the applicant.

                The above-noted advance notice periods are with respect to the CTA process only and do not take
                into account time constraints that may be imposed by other government departments or agencies.


20-4            Application to CTA and CBSA for Coasting Trade Licence
                This temporary admission program provides for short-term market needs that cannot be filled from the
                existing capacity in Canada. Under this program, foreign and non-duty paid vessel operators may
                make an application to operate such vessels temporarily in Canada under a Coasting Trade Licence
                (Form C48). Operators may be entitled to use foreign vessels on a duty-reduced basis when no
                suitable Canadian vessel is available to carry out the required operations.

                The Applicant may apply to the CBSA for partial duty remission at the same time that the Coasting
                Trade Licence is applied for. Most vessels are dutiable at 25% of their appraised value. This
                valuation is based on two to three appraisals provided by recognized surveyors/brokers/appraisers.
                Pursuant to the Vessel Duties Reduction or Removal Regulations,58 where relief is issued through
                partial remission, duty is calculated at the rate of 1/120th of the duty rate, with the minimum payment
                being one month’s duty and taxes.

                The application for a Coasting Trade Licence must be sent to both the CTA and the CBSA. The
                components of this application are examined below. In practice, most Operators hire an agent to look
                after the application requirements.

                Any written information pertinent to the Agency consideration of a Coasting Trade Licence
                application and its determination under the Coasting Trade Act must be sent by fail, facsimile, e-mail,
                or hand delivered to the Manager, Marine Complaints and Investigations, Rail and Marine Branch,
                Canadian Transportation Agency:
                By Mail:              Ottawa, Ontario
                                      K1A 0N9
                By Hand:              15, Eddy Street
                                      Gatineau, Quebec, K1A 0N9
                By Fax:               (819) 934-0631
                By E-mail:            maritime.cta@cta-otc.gc.ca




                58
                     SOR/90-304, SOR/91-277, SOR/94-234 and SOR/98-28.


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                                                                                20 – Foreign Vessel Authorizations


20-4-1         Components of Coasting Trade Licence Application
               Requests for temporary vessel importation must be made to the CTA and the CBSA by a Canadian
               resident, typically an agent. Such requests must comply with the requirements of the Application for
               Vessel Temporary Admission to the Coasting Trade of Canada (Form C47). Form C47 requires
               that the following information be included:
                    •   name of vessel;
                    •   nationality of ship;
                    •   characteristics of vessel;
                    •   complete description of the proposed engagement/operation;
                    •   geographical location(s) including origin, destination, and all points/ports to be served;
                    •   details of cargo;
                    •   number of passengers;
                    •   special characteristics;
                    •   customs office of importation;
                    •   customs office of accounting;
                    •   period for which permission is required (maximum 12 months);
                    •   starting date;
                    •   completion date; and
                    •   details of Applicant (name, address, phone and fax numbers).59

               If an application is made for an unidentified vessel, the application must give sufficient information
               about the proposed activity in order for a vessel to be identified.

               As required by the Coasting Trade Act, applications must be signed by a Canadian resident. As the
               onus is on the Applicant to justify the need to import a foreign ship, the application must clearly state
               all the relevant facts and circumstances and the grounds for the application. The application must
               provide comprehensive justification as to why a foreign ship must be imported to perform the
               proposed activity or provide the proposed service. When applicable, the justification should focus
               mainly on the nature of the proposed service or activity and include, but not be limited to the following
               information:
                    •   a detailed description of the activity or service identified in the application;
                    •   the type of ship required, size, capability and any other specifications that are pertinent to the
                        proposed activity or service;
                    •   reasons for the proposed dates and why they cannot be changed, if applicable;
                    •   identify operators of Canadian registered ships who have been contacted before the filing of
                        the application;
                    •   why the Applicant determined that there was no alternative but to import the foreign ship
                        identified in the application; and
                    •   any other relevant information supporting the application.

               Once completed, applications are to be sent to both the CTA and the CBSA. A covering letter
               should accompany the application, setting out in summary form the intent of the request.


               59
                  See also Memorandum on Temporary Importation of Vessels, March 9, 1995, Appendix C – Guidelines for
               Completing an Application for Vessel Temporary Admission to the Coasting Trade of Canada pursuant to the
               Coasting Trade Act and the Vessel Duties Reduction or Removal Regulations, online at:
               http://www.cbsa-asfc.gc.ca/E/pub/cm/d3-5-7/d3-5-7-e.html (date accessed: August 30, 2000).


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 20 – Foreign Vessel Authorizations


20-5            CTA Identifies, Notifies and Consults with Canadian Vessel
                Operators re: Application
                Following the receipt of an application, a Notice of Coasting Trade Licence Application (Notice of
                Application) is issued requesting operators of Canadian registered ships identified by the CTA
                search in its data base60 to advise, within the time frames provided, whether they have a suitable ship
                available to provide the service or perform the activity described in an application, and in the case of
                passenger ships, whether an identical or similar adequate marine service is offered. If the application is
                not opposed, the next step in the process is found in section 20-7. If the application is opposed, the
                next step is set out in section 20-6.


20-6            Pleadings Submitted by Opposing Party and Applicant
                The CTA process provides for a consultation of Canadian vessel operators, who are given the
                opportunity to advise the CTA in a specified period of time if they have a vessel to offer for the
                activity.

                Generally, when an offer of Canadian vessel is received, the Applicant is given the opportunity to
                comment on the offer, and the maker of the offer is allowed to reply to these comments. It is up to
                each party to bring forward its arguments. At the end of these pleadings, the CTA will consider the
                information filed and proceed to determine whether the vessel offered is suitable and available for the
                activity proposed. The CTA will examine the technical aspects, the financial issues and the
                commercial considerations submitted before issuing its decision.

                Objections and offers of Canadian registered ships filed with the Agency need to be simultaneously
                copied by the party filing the offer to the Applicant for comments within the deadline prescribed in
                the Agency’s Notice of Application. Any comments submitted by the Applicant then need to be
                copied to the operator of the Canadian registered ship for reply, if any, within the deadline established
                in the Agency’s notice of application.

                The length of time required for the pleadings and the Agency decision is normally related to whether
                a Canadian registered ship has been offered and to the supporting information submitted by each of
                the parties during the pleadings. The CTA needs sufficient time to assess the evidence submitted and
                its determination may be delayed if the Agency needs to request additional information from the
                parties.

                With respect to the fast track processing of urgent applications related to a sudden and unforeseen
                short-term commercial opportunity, the Applicant must obtain a list of potential operators of
                Canadian registered ships from the CTA and conduct its own search by contacting the operators
                identified on the list. Further, the Applicant must ask the contacted parties to advise the CTA by fax
                or e-mail whether they can offer a Canadian registered ship or not. With respect to all other urgent
                applications, the CTA will perform the data base search to establish the list and will contact the
                operators. An urgent application can be processed in the fast track in a day or less if no suitable
                Canadian registered ship is available to perform the activity or provide the service described in the


                60
                  The CTA marine data base, which includes a compilation of Canadian registered ships, is an essential
                component of the processing of Coasting Trade applications and is continuously updated. In this regard,
                operators of Canadian registered ships are encouraged to notify the Agency of any changes to their fleet.


 20-6                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                                 20 – Foreign Vessel Authorizations


              application. However, if an offer for such a ship is filed, the fast track process may no longer be
              feasible.

              The time periods, in business days, allowed for the pleadings related to each application process are
              as follows:
              Advance notice:                            30 days       15 days       8 days      Fast track
               st
              1 answer from respondent
              (offer, if any):                           8 days        3 days        2 days          *
              Applicant’s (comments):                    5 days        3 days        2 days          *
               nd
              2 answer from respondent (reply):          2 days        1 day         1 day           *

              * Fast track time limits will be assess on a case-by-case basis.

              It must be noted that the above time periods and the timing of CTA decisions are subject to the
              nature of the issues raised during the pleadings.

              Each party is responsible for presenting its case and making all pertinent arguments in its pleadings,
              as the CTA bases its decision on the information provided.

              The party filing an offer in answer to an application must provide factual information and specifics
              with respect to the offered ship(s) or the service available. Such offer should include the following
              information:
                    •   name, description and specifications of the offered ship(s), including type, size, capacity,
                        capability, on-board equipment, and any other relevant information justifying the offer;
                    •   how is(are) the ship(s) going to perform the activity or provide the service described in the
                        application;
                    •   availability of the offered ship(s) with respect to the time period identified in the application,
                        or its opinion with respect to another period when the activity could be performed; and
                    •   in the case of an objection, all pertinent information on the deemed identical or similar
                        adequate marine service.

              When an offer for a Canadian registered ship is filed in response to an application, the onus is on the
              Applicant to demonstrate that the ship offered is not suitable and/or not available for the activity
              proposed in the application.

              The Coasting Trade Act does not define the terms “suitable,” “available,” or “identical or similar
              adequate marine service.” Therefore, the Agency’s consideration of applications is based on the
              merits of each application, including the offer and related pleadings as there are no unique criteria or
              standards to determine whether a Canadian registered ship is suitable and available or, in the case of
              passenger services, whether there is an identical or similar adequate marine service available. Subject
              to the nature of the proposed service or activity described in an application, the Agency takes into
              consideration various factors to determine whether an offered Canadian ship or non-duty paid ship is
              suitable and available to perform the service or activity. The factors to be considered may vary
              substantially between an application for a planned, long-term survey or resupply activity and an
              application for a short-term urgent activity. Complete decisions and other CTA rulings with respect to
              Coasting Trade Licence are listed in the Agency’s website at http://www.cta-otc.gc.ca.



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 20 – Foreign Vessel Authorizations


                An Applicant may withdraw an application at any time before a CTA decision is issued which will
                terminate the CTA’s processing of the file. Similarly, an offer of a Canadian ship may be withdrawn
                at any time before a CTA decision is issued. Modifications to applications or offers are acceptable
                under certain circumstances provided the changes do not significantly alter the nature of the
                application or offer. For example, modifications to applications or offers may be considered for the
                following elements:
                    •    nature of the proposed activity;
                    •    type of ship, characteristics, equipment;
                    •    area where the proposed activity will be performed
                    •    starting/ending dates of the proposed activity; or
                    •    dates of availability of the offered ship.

                In all cases, the CTA considers the proposed modifications to an application or offer and decides
                whether the changes are acceptable or whether a new application and Notice of Application are
                required.


20-7            CTA Determines Availability of Suitable Canadian Vessels
                The CTA must determine the availability of suitable Canadian vessels for meeting the needs of the
                Applicant (s. 8(1) of the Coasting Trade Act). As required under s. 29(1) of the Canada
                Transportation Act, the CTA makes its decision in any proceedings as expeditiously as possible, but
                no later than 120 days after the originating documents are received by the CTA, unless the parties
                agree to an extension of this time period or a regulation made under the Act provides otherwise.

                If the CTA finds that no Canadian vessels are suitable and available, the next step in the process is
                set out in section 20-9. If the CTA finds that there are suitable and available Canadian vessels, the
                next step is found in section 20-8.


20-8            Process Stops; Possibility for Review
                If the CTA finds that a suitable Canadian vessel is available, the process would stop at this point.

                Should a party disagree with a CTA decision, three avenues are open to contest the decision.

                Under section 32 of the Canada Transportation Act, the CTA may review, rescind or vary any
                decision made by it or may re-hear any application before deciding it only if, in its opinion, there has
                been a change in the facts or circumstances pertaining to the decision. It should be noted that even
                though this may be done at anytime, the issue could be moot if a Coasting Trade Licence has already
                been issued as the Licence would not be revoked as a result of a review of an Agency decision.
                However, if there is an application for review of a CTA decision after the letter of authorization from
                the CBSA has been issued, but before a Licence has been issued, the issuance of a Licence could be
                suspended if the CTA decides that there are circumstances that justify the review of its decision.

                Under section 40 of the Canada Transportation Act, a party can petition the Governor in Council to
                vary or rescind any decision made by the CTA.




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                                                                             20 – Foreign Vessel Authorizations


               Under section 41 of the Canada Transportation Act, a party can apply to the Federal Court of
               Appeal within 30 days of the issuance of a CTA decision for leave to appeal the decision on a
               question of law or jurisdiction.

               The CTA’s “General Rules” also contain provisions respecting practices and procedures followed in
               respect of proceedings before the CTA. Some provisions of these Rules are applicable to the
               Coasting Trade Licence application process and may take precedence over any guidelines:
                   •   all information filed with the CTA is normally placed on the public record, however, section
                       11 provides for the filing of confidential information and it explains the procedure for doing
                       so;
                   •   section 8 provides for extended or abridged time limits in any proceedings; and
                   •   section 51 provides for an oral hearing of the parties if it is deemed necessary.


20-9           CTA Communicates Decision to CBSA, (and TCMS, HRDC & CIC)
               Once the CTA determines that no suitable Canadian vessels are available for the purposes set out in
               the application, it communicates this determination formally to the CBSA in the form of a letter. The
               letter is typically copied to TCMS, Human Resources Development Canada, Citizenship and
               Immigration Canada and the Department of Foreign Affairs and International Trade (for further
               details on HRDC’s and CIC’s processes, see Chapter 21 of this Guide).


20-10          CBSA Issues Letter to Applicant re: Conditions for Coasting Trade
               Licence Issuance
               Upon receiving the CTA’s decision that no suitable Canadian vessels are available, the CBSA
               advises the Applicant by letter that he/she must contact TCMS, the Board, or a Certifying
               Authority, as appropriate, to conduct an inspection of the vessel. The Applicant will also be informed
               that proper Worker Authorizations will have to be obtained for foreign workers aboard the vessel (for
               further details on Foreign Worker Authorizations, see Chapter 21 of this Guide). Before the CBSA
               may issue a Coasting Trade Licence, TCMS must determine whether certain marine safety
               requirements have been fulfilled. These steps are examined below.


20-11          Is the Vessel to be Inspected by TCMS or the Board?
               Once the Applicant receives a letter from the CBSA stating that the Coasting Trade Licence will be
               accorded after a vessel inspection is carried out, he/she must contact TCMS, or the Board, as
               appropriate, to conduct an inspection of the vessel.

               TCMS and the Board cooperate in the division of inspection duties by vessel type. Some of the
               responsibilities have been divided in the Memorandum of Understanding signed on December 6, 1989, in
               its current version. Sections 20-12 to 20-13 below summarize the contents of this MOU. These sections
               provide only a brief overview of the contents of the MOU. Readers are advised to examine the MOU and
               to speak to staff of TCMS and the Board to ensure compliance.




 Newfoundland and Labrador Offshore Guide – January 2004                                                        20-9
 20 – Foreign Vessel Authorizations


20-12           TCMS Inspection and Payment of Fees
                TCMS has the responsibility of inspecting vessels that fall under the following categories: shuttle tankers,
                geotechnical vessels, standby vessels, supply/support/construction vessels, and diving vessels.

                Applicants must provide a minimum of 24 hours notice for inspection, whether the vessel is in Canada or
                abroad. TCMS may inspect a vessel up to 40 days before it is to be used. A Certificate will only be issued
                once TCMS re-inspects the vessel. If the results of the inspection are negative, all problems must be
                rectified before the vessel may be re-inspected (20-12-1).


20-12-2         TCMS Certifies Vessel for Marine Safety and Issues Safety Inspection
                Certificate (SIC 10)
                If the results of the inspection are positive, and the fees set out by TCMS’s regulations have been
                paid, a Letter of Compliance for Coasting Trade Licence under the Coasting Trade Act will be
                issued.

                The Letter of Compliance (also called a SIC 10) is issued for a maximum of one year for a non-
                Canadian ship engaged in the coasting trade of Canada that carries valid certificates for hull and
                machinery issued by a recognized classification society. TCMS inspects the ship in accordance with
                the provisions of the Non-Canadian Ships Safety Order,61 and in compliance with the requirements
                of the regulations made under section 410 of the Canada Shipping Act.62


20-12-3         For Standby Vessels, TCMS Also Issues a Letter of Compliance
                For non-Canadian registered vessels performing standby functions in the Newfoundland and
                Labrador Offshore Area, a Letter of Compliance for Standby from TCMS is also necessary. A
                Letter of Compliance for Standby will be issued upon payment of fees based on tonnage, in
                accordance with the Board of Steamship Inspection Scale of Fees.


20-13           Board Inspection and Payment of Fees
                The Board is responsible for inspecting all vessels, including: mobile offshore units, storage tankers,
                accommodation vessels, helicopter facilities (which require a Certificate of Fitness), and all other
                “marine installations or structures” (which will also require a Certificate of Fitness).

                Pursuant to paragraph 152(a) of the C-NAAIA, a “marine installation or structure” includes:
                           any ship, offshore drilling unit, production platform, subsea installation, pumping station,
                           living accommodation, storage structure, loading or landing platform…
                           but does not include any vessel that provides any supply or support services to a ship,
                           installation, structure or work.…

                If the results of the inspection are negative, the problems must be rectified before the Board re-inspects
                the vessel (20-13-1).

                61
                     P.C. 1957-1500, as amended.
                62
                     R.S.C. 1985, c. S-9.


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                                                                                20 – Foreign Vessel Authorizations


20-13-2        For “Marine Installation or Structure,” Certificate of Fitness Must be
               Obtained from Certifying Authority
               Where the vessel is a “marine installation or structure,” as defined above, the Board requires that a
               Certifying Authority inspect and approve the fitness of the vessel by issuing a Certificate of Fitness.
               See Chapter 1 of this Guide for a description of the various Certifying Authorities and a summary of
               the Certificate of Fitness requirements.


20-13-3        Board Approves Vessel for Marine Safety
               If the results of the inspection are positive, the Board will approve the vessel for marine safety
               purposes.


20-14          TCMS or the Board Will Advise CBSA of Approval of Vessel
               Inspection
               Once TCMS or the Board approves the marine safety of the vessel, the approving agency will advise
               the CBSA.


20-15          Duties Paid to CBSA
               Before a Coasting Trade Licence is issued, the Applicant is required to pay the applicable taxes
               (GST) and duties, as outlined in section 20-4.

               In addition to the Coasting Trade Licence requirements, duty and taxes, Applicants are to ensure
               that all vessels entering Canadian customs waters, including Canadian vessels, report their arrival in
               writing to the nearest Canada Customs office. This report should be made by way of a General
               Declaration – Form A6, pursuant to the Customs Act. A similar declaration on a separate Form A6
               is required to be made as soon as the coasting trade movements set out in the Coasting Trade Licence
               are completed.63


20-16          Coasting Trade Licence Issued
               Once approvals are obtained from the CTA, the CBSA, and either the Board or TCMS, a
               Coasting Trade Licence is issued and the foreign vessel for which the authorization was sought may
               be used in Canadian waters.

               Determinations of the CTA pursuant to the Coasting Trade Act are provided to the Minister of
               National Revenue for any necessary action under the Coasting Trade Act. A CTA decision does not
               constitute an authority to commence operations in respect of the service for which the application has
               been made with the Minister of National Revenue. The Licence issued by the Minister will constitute
               the authority.



               63
                  See paragraphs 25-26 of Memorandum on Temporary Importation of Vessels, March 9, 1995, online at:
               http://www.cbsa-asfc.gc.ca/E/pub/cm/d3-5-7/d3-5-7-e.html (date accessed: August 30, 2000).


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 20 – Foreign Vessel Authorizations




20-17           Ongoing Inspections of Vessel
                Under certain circumstances, TCMS and the Board may continue to inspect the vessel while the
                Coasting Trade Licence is in effect, to ensure the marine safety fitness of the vessel.


20-18           Extension of Coasting Trade Licence – Must Restart Process
                If the Applicant wishes to extend the term of the Coasting Trade Licence, he/she must restart the
                process commencing from section 20-4. If the Applicant needs the foreign vessel for under two weeks
                beyond the term of the Licence, it is possible that, upon receipt of a letter outlining this need, the
                CTA may allow the vessel to be used for that period without the need for reapplication. Also, if an
                inspection of the vessel has been conducted within four months of the end of the term of the licence, it
                is possible that TCMS or the Board may waive the requirement for a subsequent vessel inspection.




 20-12                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                               21 – Foreign Worker Authorizations



               21.0 FOREIGN WORKER AUTHORIZATIONS

               Chapter 21 describes the steps for obtaining work permits to allow foreign workers to work in
               Canada, including the Newfoundland and Labrador offshore area. Chart 21 provides an illustration
               of these procedures. Please note that the procedures and process described below are up to date as of
               February 2001. The following information applies to both domestic and foreign employers, seeking to
               bring foreign workers to work in Canada and/or Canadian waters.

               In general, foreign workers will be authorized to work in Canada temporarily when it will not
               adversely affect employment and career opportunities of Canadian citizens or permanent residents
               (otherwise known as landed immigrants).

               This chapter is only a summary of the various requirements. Applicants are advised to consult official
               documents and information provided by HRDC and CIC.

               Note: All processes described in this chapter must be adhered to by all companies seeking the
               admission of foreign workers to Canada. This includes companies who obtain contracts or sub-
               contracts in the international marketplace and who include a full or partial foreign worker complement
               in their bid.


21-1           Employer Contacts HRDC/CIC for Advice
               Employers wishing to apply for Employment Confirmations for foreign workers must contact an
               HRDC officer in the geographic area in which the job is offered. An HRDC officer will consider
               confirmation of an offer of employment for a foreign worker after reviewing the information presented
               by the employer (or authorized agent). The employer is advised to contact HRDC well in advance of
               the project commencement to present the foreign worker job descriptions, qualifications and rationale,
               negotiate conditions, (i.e. training/succession plans if applicable to the situation) determine which jobs
               may require advertising and to ascertain which jobs, if any, may be exempt from the HRDC
               confirmation process.64


21-2 & 21-3 Is Employment Confirmation Required?
               Following the employer’s initial discussions with HRDC/CIC, the employer may be informed that
               Employment Confirmations are not necessary. If work is exempt from the Employment Confirmation
               process, the next step would be a decision by CIC to issue or refuse Work Permits. This decision is
               described below at section 21-8.

               If the work is not exempt from the Employment Confirmation process, the next step is found below at
               section 21-4.




               64
                  In Newfoundland and Labrador, Applicants may contact HRDC, who will liaise with CIC, to obtain
               information with respect to exemptions to the Employment Confirmation process.


 Newfoundland and Labrador Offshore Guide – January 2004                                                           21-1
21 – Foreign Worker Authorizations




21-2                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                                              21 – Foreign Worker Authorizations


21-4           Application Submitted to HRDC
               The employer, or the employer’s authorized agent, is required to provide HRDC with a proposal
               providing an overview of the project, rationale for the need for foreign workers, and completed
               application form(s) for the foreign worker(s). In general, the submission process requires the following
               information:
                   •    employer information (including crew lists, where appropriate;)
                   •    staffing summary;
                   •    presence, if any, of an on-site union (Does the position fall under a collective agreement?);
                   •    foreign worker employee information;
                   •    efforts to recruit Canadians and results;
                   •    job title, job description, job location(s), duration, qualifications, wages and experience
                        required;
                   •    benefit to Canada and rationale for the use of foreign workers; and
                   •    training and succession plans, where applicable, for Canadians to replace the foreign
                        workers.


21-5           HRDC Reviews Application
               The following is not an exhaustive list, but does describe situations where HRDC may issue an
               Employment Confirmation. Often HRDC considers several of the following factors when reviewing a
               Confirmation request:
                   •    the employer has satisfactorily demonstrated that a reasonable search for Canadian workers
                        was unsuccessful or that no Canadian can be trained for the job within a reasonable period of
                        time;
                   •    the job is very short-term, will not be repeated, and a Canadian is not available;
                   •    the employer’s commitment to train Canadians to eventually replace foreign workers (this
                        commitment may be long term and is subject to monitoring by HRDC);
                   •    the employer can demonstrate that the foreign worker’s skills and knowledge will provide a
                        net economic benefit to Canada (through job creation, training or maintaining jobs for
                        Canadians);
                   •    are wages and working conditions sufficient to attract and retain Canadians?;
                   •    that the qualifications for the job are bona fide; and
                   •    expert opinions are sought from HRDC labour market analysts, unions guilds, professional
                        associations, Boards and other federal or provincial departments, e.g. Transport Canada.

               There are a number of instances where an employer cannot expect to fill a job vacancy with a foreign
               worker. For example, these include:
                   •    occupations where qualified Canadians or permanent residents/landed immigrants are
                        available;
                   •     any part-time/casual position;
                   •    position where the employer cannot clearly demonstrate an employee/employer relationship;
                   •    cases where an employer has laid off Canadians or permanent residents and is now
                        endeavouring to fill the position(s) with foreign workers;
                   •    where there is an actual or pending labour dispute;
                   •    incentive-based occupations; and
                   •    where wages and working conditions are not sufficient to attract and retain Canadians.


 Newfoundland and Labrador Offshore Guide – January 2004                                                          21-3
 21 – Foreign Worker Authorizations


21-6           HRDC Decision to Issue or Refuse Employment Confirmation
               Based on the criteria set out in section 21-5, HRDC will make a decision to grant or refuse
               confirmation.


21-7           HRDC Employment Confirmation Sent to CIC and HRDC Approval
               Letter Sent to Employer
               If a positive confirmation decision is made, the following process will occur:
                      •    HRDC will produce the Employment Confirmation document and send it to the
                           appropriate CIC processing location; and
                      •    HRDC will send the employer an Approval Letter with instructions to initiate the Work
                           Permit process with CIC.


21-8           Decision by CIC to Issue/Refuse Work Permit Based on Employment
               Confirmation and Other Criteria
               When finalizing the Employment Confirmation, HRDC will provide advice to the employer on the
               next steps to be followed to obtain the Work Permit from CIC.

               The processing of the Work Permit may be done at different locations. However, generally, only
               United States citizens and the residents of Greenland and St. Pierre and Miquelon may be processed
               and given their Work Permit at the Port of Entry. If the individual is of another nationality but has a
               “green card” (resident alien status) to work in the United States, they may also be processed at a
               Port of Entry. All other nationalities must receive their Work Permit prior to arriving in Canada.
               Application for the Work Permit must be made at a Canadian consulate or embassy abroad.

               It is important to note that the Employment Confirmation is not a guarantee that entry into Canada
               will be permitted. It is only one step in the process. All foreign workers are subject to an examination
               interview\assessment at the time they request a Work Permit and cannot be “pre-cleared”. Entry to
               Canada may be denied on other grounds, such as, criminal, health or security risks. Furthermore,
               some nationalities may require visitor visas in addition to the Work Permit. There is a cost for the visa
               of $75.00 for single entry or $150.00 for multiple entry.65 Such visas can only be obtained at
               Canadian consulates, embassies or visa offices abroad. There is no charge for the Confirmation
               process, however, the Work Permit assessment or processing costs $150.00 and is paid to CIC at the
               time the Work Permit is issued.


21-9 & 21-10 Foreign Workers Permitted/Not Permitted to Work
               If CIC issues an Work Permit, the foreign worker will be allowed to work in Canada, or in Canadian
               waters. Location of work, occupation and duration of employment are specified on the Work Permit.
               If the Work Permit is not issued, the foreign worker will not be allowed to work in Canada.




               65
                    Fees are subject to legislative changes.


 21-4                                                   Newfoundland and Labrador Offshore Guide – January 2004
                                                                      21 – Foreign Worker Authorizations


21-1           Monitoring of Confirmations by HRDC
               Where an Employment Confirmations has been issued by HRDC based on a number of conditions,
               such as the implementation of a succession plan, HRDC will monitor the fulfilment of such
               conditions.




 Newfoundland and Labrador Offshore Guide – January 2004                                             21-5
21 – Foreign Worker Authorizations



Notes




21-6                                 Newfoundland and Labrador Offshore Guide – January 2004
                                      Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                            Approvals in the Newfoundland Offshore Area

APPENDIX A - PRINCIPAL REGULATORY/ADVISORY AGENCIES FOR
OIL AND GAS APPROVALS IN THE NEWFOUNDLAND AND LABRADOR
OFFSHORE AREA

The following regulatory or advisory bodies exercise control over petroleum exploration and production activities in
the Newfoundland and Labrador Offshore Area. These bodies are divided in the following categories: joint
federal-provincial agencies, federal agencies and provincial agencies.

Many of the relationships between these organizations, as they relate to the offshore petroleum industry, are
documented in a series of MOUs which have been coordinated by the Canada-Newfoundland Offshore Petroleum
Board. It should, however, be noted that most of these MOUs are currently under review, and they are at various
stages of updating. Clarification about the current status of any of these MOUs should be sought from the Board.
At this point, the Board plans to develop one new MOU concerning issues related to adjacent jurisdictions in
offshore/onshore areas of western Newfoundland and Labrador.


JOINT FEDERAL-PROVINCIAL REGULATORY AGENCIES

Canada-Newfoundland Offshore Petroleum Board or CNOPB
The Canada-Newfoundland Offshore Petroleum Board (CNOPB) is federal-provincial regulatory agency
responsible for the management of the offshore oil and gas industry in Newfoundland and Labrador under the
mandate established by the Atlantic Accord legislation. The mission of the CNOPB and its staff is the timely,
professional and impartial discharge of the statutory mandate as prescribed by the Canada-Newfoundland Atlantic
Accord Implementation Acts. The Board’s role in resource management extends to reservoir, rights administration
and resource estimation; operations and safety; environmental affairs; and Canada-Newfoundland benefits.

The CNOPB, which is established by the joint operations of the Canada-Newfoundland Atlantic Accord
Implementation Acts, has authority in the “offshore area,” which is defined in the Acts as “those submarine areas
lying seaward of the low water mark of the province and extending, at any point, as far as (i) a prescribed line, or
(ii) where no line is prescribed at that location, the outer edge of the continental margin or a distance of 200
nautical miles from the baselines from which the breadth of the territorial sea of Canada is measured, whichever is
the greater.”

The CNOPB has had an effective working relationship for many years with the Canada-Nova Scotia Offshore
Petroleum Board and in recent years has had effective dialogue with the authorities in St. Pierre and Miquelon on
issues of mutual concern.




Newfoundland and Labrador Offshore Guide – January 2004                                                           A-1
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

FEDERAL REGULATORY/ADVISORY AGENCIES

Atlantic Canada Opportunities Agency (ACOA)
The object of the Atlantic Canada Opportunities Agency is to support and promote opportunities for the economic
development of Atlantic Canada, with particular emphasis on small and medium-sized enterprises. This is
accomplished through policy, program and project development and implementation and by advocating the
interests of Atlantic Canada in national economic policy, program and project development and implementation.66
ACOA is a signatory on the Board’s: “Memorandum of Understanding Concerning Implementation of the
Economic Growth and Development Provisions of the Atlantic Accord and the Canada-Newfoundland Atlantic
Accord Implementation Acts Among the Government of Canada, the Government of Newfoundland and Labrador
and the Canada-Newfoundland Offshore Petroleum Board.” Its primary role in this MOU is to serve as an
advisor/consultant to the Board on matters relating to Canada-Newfoundland Benefits Plans.

Canada Border Services Agency (CBSA)
Pursuant to sections 4.(1) and 5 of the Coasting Trade Act,67 and the provisions of the Customs and Excise
Offshore Application Act,68 the Customs Act69 and the Customs Tariff 70 the Canada Border Services Agency
(CSBA),71 in association with the Canadian Transportation Agency and Transport Canada – Marine Safety, is
responsible for administering a temporary admission program for vessels (see below under CTA and Transport
Canada). A separate but relevant procedure for the temporary Work Authorization of foreign workers is set out
below under the description of Citizenship & Immigration Canada – Human Resources Development Canada
(CIC-HRDC).

This temporary admission program provides for short-term market needs that cannot be filled from the existing
capacity in Canada. Under this program, foreign and non-duty paid vessel Operators may make an application to
operate such vessels temporarily in Canada under a Coasting Trade Licence (Form C48) and on a duty-reduced
basis when no suitable Canadian vessel is available to carry out the required operations.

Details on the components of the Coasting Trade Licence application are found in Chapter 20 of this Guide.

At present, although no Memorandum of Understanding has been signed between the CSBA (formerly the
Canada Customs and Revenue Agency) and the Board to coordinate regulatory duties, discussions to draft an
MOU have commenced between the two agencies.

Canadian Environmental Assessment Agency (CEAA)
The Canadian Environmental Assessment Agency (the Agency) is a federal body created in 1995 under the
Canadian Environmental Assessment Act (the Act)72 to:
      •   administer and promote compliance with the federal environmental assessment process;

66
   See s. 12 of the Atlantic Canada Opportunities Agency Act, R.S.C. 1985, c. 41 (4th Supp.). For more details on the
Agency’s mandate, see its website at: www.acoa.ca.
67
   S.C. 1992, c. 31.
68
   R.S.C. 1985, c. C-53.
69
   R.S.C. 1985, c. 1 (2nd Supp.).
70
   S.C. 1997, c. 36.
71
   On December 12, 2003, the Customs Program of the Canada Customs and Revenue Agency was transferred to the new
Canada Border Services Agency.
72
   S.C. 1992, c. 37, as am. S.C. 1994, c. 46.


A-2                                             Newfoundland and Labrador Offshore Guide – January 2004
                                       Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                             Approvals in the Newfoundland Offshore Area

     •   provide advice to the Minister of the Environment on the Minister’s responsibilities under the Act;
     •   provide opportunities for public participation in the federal environmental assessment process; and
     •   promote sound environmental assessment practices.73

The federal environmental assessment process as set out in the Act is only triggered when a “federal authority”
performs one or more of the following functions in relation to a “project”:
     •   proposes the project;
     •   grants financial assistance to the project;
     •   provides an interest in land to enable the project to be carried out; or
     •   exercises a regulatory duty in respect of the project and that regulatory duty is specified in the Law List
         Regulations.74

A detailed description of this federal environmental assessment process is set out in Chapter 15 of this Guide. In
administering and promoting compliance with the EA process, the Agency has a close working relationship with
the CNOPB.

The CNOPB was designated by regulation as a federal authority in 1997, pursuant to paragraph 59(e) of the
Act.75 Therefore, when the CNOPB authorizes offshore development projects, this authorization triggers the
environmental assessment (EA) process because it provides an interest in land to enable the project to be carried
out, as outlined above. In addition, the Law List Regulations specify two CNOPB legislated decisions which also
trigger the EA process.

Canadian Transportation Agency (CTA)
The Canadian Transportation Agency (CTA) was created by the Canada Transportation Act76 in 1996,
assuming the functions of the now-defunct National Transportation Agency.77 In association with the Canada
Border Services Agency and Transport Canada, it is responsible for administering a temporary admission program
for foreign vessels (see other sections for the functions of CBSA and Transport Canada). Also, a separate but
relevant procedure for the temporary Work Authorization of foreign workers is set out below under the description
of Citizenship & Immigration Canada (CIC) and Human Resources Development Canada (HRDC).

The CTA exercises regulatory responsibility for authorizing the use of foreign vessels after determining that no
Canadian vessels are available for operations or activities proposed by the Applicant (s. 8(1) of the Coasting Trade
Act). Details of the CTA’s regulatory process are set out in Chapter 20 of this Guide.

Although the CTA sometimes works with the CNOPB, the two have not signed a Memorandum of
Understanding formalizing their relationship, nor has one been considered.




73
   For further elaboration, see “The Canadian Environmental Assessment Agency – Description”, online at:
http://www.ceaa-acee.gc.ca/index_e.htm (date accessed: July 6, 2000).
74
   S. 5(1), Act and Law List Regulations, SOR/99-330 and SOR/99-438, as am. July 28, 1999 and November 4, 1999.
75
   Federal Authorities Regulations, SOR/96-280.
76
   S.C. 1996, c. 10.
77
   For more information on the CTA, see online: http://www.cta-otc.gc.ca.


Newfoundland and Labrador Offshore Guide – January 2004                                                            A-3
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

Citizenship & Immigration Canada (CIC)
Citizenship & Immigration Canada (CIC) exercises legislative responsibility for foreign workers in Canada,
including Canadian waters, pursuant to s. 5(3) of the IRPA. An exception to CIC’s legislative authority is with
respect to seismic operations, performed in Canadian waters beyond 12 nautical miles from the baselines. In
general, all other operations are subject to the IRPA and its related regulations, pursuant to which only Canadian
citizens and permanent residents (otherwise known as landed immigrants) may work in Canada, without obtaining
an Work Permit from CIC.

Generally, this Work Permit is issued after Human Resources Development Canada (HRDC) has issued an
Employment Confirmations regarding the position for which a Work Permit is sought. There are some jobs which
may be exempt from the Employment Confirmation process. Applicants may contact HRDC, who will liaise with
CIC to obtain information with respect to exemptions to the Employment Confirmation process. Details on
HRDC’s regulatory role as well as CIC’s process for obtaining Work Permits are found in HRDC’s section
below, and Chapter 21 of this Guide, respectively.

Environment Canada (EC)
Environment Canada (EC) is a science-based federal department with legislated mandates in the offshore with
respect to the following areas:
      •   protection of migratory birds and migratory bird sanctuaries (Migratory Birds Convention Act, 1994);78
      •   regulatory authority over discharges of polluting substances into water frequented by fish (Fisheries Act);79
      •   regulation of Disposal at Sea by the issuance of Permits (Canadian Environmental Protection Act,
          1999).80 See Chapter 17 of this Guide for permitting process;
      •   regulatory authority over various life cycle aspects of a wide range of toxic substances (CEPA, 1999);
      •   provision of accurate information of weather, sea-states and ice movement;
      •   support for other federal regulators (such as CEAA and DFO);
      •   environmental emergencies; and
      •   environmental assessments.

EC is also the lead federal department in promoting a variety of federal policies and programs concerning the
environment including the “Federal Policy on Wetland Conservation,” “A Wildlife Policy for Canada,” the
“Federal Water Policy,” “Toxic Substances Management Policy,” and the “Federal Policy for Pollution
Prevention.”81

EC’s responsibilities with respect to offshore oil and gas exploration and production are delivered by the following
three departmental branches:
      •   The Meteorological Service of Canada:
          −  under the authority of the Department of the Environment Act facilitates security and safety by
             providing accurate information on weather, sea-state and ice movement.
      •   The Environmental Conservation Branch:
          −  administers the Migratory Birds Convention Act and the complementary regulations including the
             Migratory Birds Regulations and Migratory Bird Sanctuary Regulations;


78
   S.C. 1994, c. 22.
79
   R.S.C. 1985, c. F-14.
80
   S.C. 1999, c. 33.
81
   For a more complete description of EC’s mandate, see: http://www.atl.ec.gc.ca


A-4                                               Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

         −  ensures Canadian Environmental Assessment Act obligations triggered by migratory bird permitting
            processes are fulfilled;
         −  administers the Canada Wildlife Act and the complementary National Wildlife Area Regulations; and
         −  administers the Species at Risk Act.
     •   The Environmental Protection Branch:
         −  administers the pollution prevention provisions of the Fisheries Act (s. 36);
         −  administers the Canadian Environmental Protection Act, 1999 and the complementary regulations
            and programs including the National Pollutant Release Inventory, New Substances Notification
            Regulations, Environmental Emergency Regulations, and Disposal at Sea Regulations;
         −  ensures Canadian Environmental Assessment Act obligations triggered by the disposal at sea
            permitting process are fulfilled;
         −  provides advice to the National Energy Board and Offshore Petroleum Boards on management of
            waste discharges;
         −  chairs the Regional Environmental Emergency Team during environmental incidents; and
         −  ensures the whole of Environment Canada’s responsibilities and expertise are considered in the review
            of offshore exploration and development proposals subject to environmental assessment processes.

EC has signed a Memorandum of Understanding with the CNOPB, the Department of Energy Mines and
Resources (now NRCan), the Newfoundland and Labrador Department of Environment and Lands (now the
Department of Environment and Labour), the Newfoundland and Labrador Department of Energy (now the
Department of Natural Resources), and the Newfoundland and Labrador Intergovernmental Affairs Secretariat82
to ensure the effective coordination of work and activities between these agencies in relation to the provision of
environmental services in the Newfoundland Offshore Area.83 Pursuant to the MOU, EC is expected to assist the
Board by offering information, advice, and/or assistance relating to:
     •   migratory birds;
     •   weather;
     •   climate;
     •   sea state;
     •   ice and icebergs;
     •   environmental quality;
     •   waste treatment and disposal;
     •   spill behaviour, containment and clean up;
     •   impact evaluation and mitigation;
     •   contingency planning and countermeasures response;
     •   spill trajectory modeling and forecasting; and
     •   chemical, biological and toxicological analyses arising from monitoring programs undertaken by the Board.

Although the MOU identifies the CNOPB as the lead agency in matters pertaining to oil and gas activities in the
Newfoundland and Labrador Offshore Area, it recognizes EC’s responsibility in the proper administration of the
Migratory Birds Convention Act, the pollution prevention provisions of the Fisheries Act, the Canada Wildlife Act,

82
   The Newfoundland and Labrador Intergovernmental Affairs Secretariat is mandated to be a signatory on all MOUs signed
between departments in the province (s. 7, Intergovernmental Affairs Act). They do not, however, have any regulatory role in
the industry whatsoever.
83
   See “Memorandum of Understanding Among the Canada-Newfoundland Offshore Petroleum Board, Environment
Canada, the Department of Energy Mines and Resources , the Newfoundland and Labrador Department of Environment
and Lands, the Newfoundland and Labrador Department of Energy and the Newfoundland and Labrador Intergovernmental
Affairs Secretariat Concerning the Provision of Environmental Services in the Newfoundland Offshore Area,” April 21,
1988.


Newfoundland and Labrador Offshore Guide – January 2004                                                                A-5
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

the Canadian Environmental Protection Act, 1999 and for ensuring departmental participation in Environmental
Assessments such as those conducted under CEAA or other processes.

EC is also represented on the Board’s Newfoundland Environmental Advisory Committee, which provides a
forum through which the Board may:
      •   receive advice and information concerning environmental and fisheries matters relevant to oil and gas
          activities;
      •   facilitate the exchange of information between involved parties; and
      •   promote a coordinated approach to the resolution of environmental and fisheries issues arising from oil and
          gas activities.

LEGISLATION ADMINISTERED BY ENVIRONMENT CANADA

Oil and gas industry activities in the Atlantic offshore must be in compliance with Environment Canada-
administered legislation and the regulations. as summarized below.

Management of Toxic Substances and Wastes

Toxic substances and waste materials are controlled by Environment Canada under the authority of the Canadian
Environmental Protection Act, 1999 (CEPA 1999). The Compliance and Enforcement Policy under CEPA,
1999 can be accessed at http://www.ec.gc.ca/ele-ale/policies/policies_e.asp.

Toxic Substances
Substances found to be toxic and listed in Schedule 1 of CEPA 1999 can be controlled by a variety of instruments
such as regulations, guidelines, codes of practice and pollution prevention plans applicable to any aspect of their life
cycle, from the research and development stage through manufacture, use, storage, transport and disposal. The
various control instruments applicable to management of scheduled toxic substances are identified at
www.ec.gc.ca/CEPARegistry/default.cfm.

New Substances Notification
The New Substances Notification Regulations of CEPA, 1999 stipulate the information that must be submitted to
Environment Canada prior to the import or manufacture of any new substance in Canada. The Domestic
Substances List, which is a list of approximately 24,000 substances that are presently in Canadian commerce, is
the basis for determining if a substance is considered to be new. Additional information on the New Substances
Notification Regulations can be accessed at http://www.ec.gc.ca/substances/.

Export and Import of Hazardous Wastes
The export and import of hazardous wastes is governed by the Export and Import of Hazardous Wastes
Regulations under CEPA, 1999. The Regulations help ensure that transboundary movements of hazardous
wastes destined for disposal, and hazardous wastes destined for recovery/recycling facilities are handled in an
environmentally sound manner. They ensure that Canadian borders continue to remain open to transboundary
movements of hazardous wastes, especially those destined for recovery/recycling operations. The Regulations are
consistent with international developments in the field, especially among Organisation for Economic Cooperation
and Development (OECD) countries.

Hazardous wastes requiring export or import notification are listed in Schedule III of the Regulations. The
Regulations and related guidance can be accessed at http://www.ec.gc.ca/tmb/eng/tmbregs_e.html.


A-6                                              Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

Disposal at Sea
Disposal at sea is governed by CEPA, 1999 and the complementary Regulations which implement Canada’s
international obligations under the London Convention on the Prevention of Marine Pollution by Dumping of
Wastes and Other Matter 1972 and the 1996 Protocol to that Convention.

Under certain circumstances, the disposal of substances at sea listed in Schedule 5 of CEPA 1999 may be
permitted. The requirement for such a permit triggers the need for an environmental assessment under the
Canadian Environmental Assessment Act (CEAA). Chapter 17 of this Guide and the website,
http://www.ec.gc.ca/seadisposal/main/index_e.htm provide further information on governance of Disposal at Sea
activities and the permitting process.

Pollutant Reporting

The National Pollutant Release Inventory (NPRI) was established in 1992 to collect data on substances of
concern in Canada. This inventory administered by Environment Canada is the only legislated, nation-wide,
publicly accessible inventory of its type in Canada. Owners or operators of offshore projects which meet certain
reporting criteria for certain substances are legally obligated to report annually before June 1st to Environment
Canada under the provisions of CEPA, 1999.

Under the authority of CEPA, 1999, the Minister of Environment publishes an annual notice in the Canada
Gazette, Part I, describing the reporting criteria and requirements of NPRI. The Canada Gazette Notices can be
obtained at: www.ec.gc.ca/pdb/npri/npri_cgaz_e.cfm.

Environmental Emergency Planning

The proposed Environmental Emergency Regulations apply to any person in Canada who owns, or has charge,
management or control of, a substance listed on Schedule 1 of the Regulations and which is presently in a quantity equal
to or greater than that specified in the Schedule. The Regulations identify information that must be submitted to
Environment Canada within 90 days after the Regulations come into force, or within 90 days after acquiring a scheduled
substance at or above the specified threshold quantities. An environmental emergency plan will be required for all
facilities that store or use any of the scheduled substances at or above the specified threshold quantities. Information on
the Regulations, made pursuant to Section 200 of CEPA, 1999 is accessible at http://www.ec.gc.ca/ee-
ue/home/home_e.asp . Final approved Regulations are published in the Canada Gazette, Part 2.

Protection of Migratory Birds

The Migratory Birds Convention Act, 1994 (MBCA) implements the 1916 treaty of the same name under which
Canada and the United States coordinate their efforts to conserve and protect migratory birds. The Parksville
Protocol, an amendment to the Convention, came into force in October 1999. Migratory birds include those
species listed in the Canadian Wildlife Service Occasional Paper No. 1, “Birds Protected in Canada under the
Migratory Birds Convention Act.”

The MBCA and the Migratory Birds Regulations include general prohibitions against harming migratory birds,
their nests and their eggs. For example, the Migratory Birds Regulations (s. 35) prohibit the deposition of any
“…oil, oil wastes or any other substance harmful to migratory birds in any waters or any area frequented by
migratory birds.”




Newfoundland and Labrador Offshore Guide – January 2004                                                               A-7
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

Permits or authorizations can be obtained under the Migratory Birds Regulations for a limited range of specific activities
that may be pertinent to offshore oil and gas. For example, a scientific permit can be obtained for certain research-related
activities, while an authorization can be obtained to deposit a harmful substance for scientific purposes. The requirement
for such permits or authorizations may trigger the need for an environmental assessment under CEAA.

Migratory Bird Sanctuaries, including Sable Island, are created pursuant to the Migratory Bird Sanctuary
Regulations. Sanctuaries represent habitat that is important to migratory birds, and serve to protect the birds from
disturbances. The Regulations prohibit, except by permit, certain activities within sanctuary boundaries. The
requirement for such a permit may trigger the need for an environmental assessment under CEAA.

The MBCA, regulations and related guidance are accessible at http://www.cws-scf.ec.gc.ca/enforce/law_1_e.cfm.
The department’s Compliance and Enforcement Policy for Wildlife Legislation, which includes the MBCA, is
accessible at http://www.cws-scf.ec.gc.ca/enforce/pol_1_e.cfm.

Protection of Species at Risk

The Species at Risk Act (SARA) came into force in June 2003 with the exception of prohibition and penalty
provisions, which will come into force in June 2004. The SARA fulfils, in part, Canada’s commitments under the
United Nations Convention on Biological Diversity, 1992. SARA aims to prevent wildlife species from becoming
extinct, and to secure the necessary actions for their recovery.

Environment Canada is responsible for the overall administration of SARA. However, the Minister of Fisheries
and Oceans is responsible for aquatic species, the Minister of Heritage is responsible for species in national parks
and the Minister of Environment is responsible for all other species including migratory birds.

SARA affords protection to species listed in Schedule 1 of the Act. Species are put on the list based on federal
government consideration of recommendations by the Committee on the Status of Endangered Wildlife in Canada
(COSEWIC). Mandatory recovery strategies and management plans are required within specific time periods for
all listed species. Schedule 1 currently lists 233 species.

The Act supports a cooperative approach by the federal, provincial and territorial governments in meeting this
goal. The federal government’s lead role in protecting all listed species in areas of federal jurisdiction, including the
oceans, is recognized under SARA. Listed migratory birds and aquatic species are to be protected under SARA
wherever they are found in Canada.

For species identified as extirpated, endangered or threatened, the SARA includes prohibitions against the killing,
harming, harassing, capturing or taking of individuals, and against destroying or damaging their residences and
critical habitat. Permits that will allow such actions may be granted if they are undertaken for scientific purposes, if
they ultimately benefit the affected species or if they are incidental to other activities.

SARA also requires that all federal environmental assessments of projects that are likely to affect listed species at risk, be
conducted in a prescribed manner (s. 79). SARA and related guidance is accessible at www.sararegistry.gc.ca .

Protection of Water Quality

Environment Canada is responsible for the administration and enforcement of Section 36 of the Fisheries Act
which prohibits the deposit of a deleterious substance into waters frequented by fish. The “Compliance and
Enforcement Policy for the Habitat Protection and Pollution Prevention Provisions of the Fisheries Act” is
accessible at http://www.ec.gc.ca/ele-ale/policies/policies_e.asp. Refer also to Chapter 16 of this Guide.


A-8                                                  Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

Protection of Air Quality

In fulfilling the federal government’s commitment to clean air, atmospheric emissions (e.g., toxics, criteria air
contaminants) are controlled under various initiatives, including the following:

    •    The National Ambient Air Quality Objectives under CEPA, 1999 identify recommended ambient
         concentration limits for a variety of air pollutants. Ambient concentrations are a result of all pollution
         sources impacting a particular area.
    •    CEPA, 1999 includes provisions for the federal government to act where air pollution may violate an international
         agreement, although any actions are generally undertaken in consultation with provincial governments. Current
         initiatives include limits on sulphur dioxide (SO2) emissions under the United Nations Economic Commission for
         Europe (UN-ECE) and the Canada-United States Air Quality Agreement, and nitrogen oxide (NOx) emission
         constraints under the Canada-US Air Quality Agreement.
    •    Ozone, PM10 (particulate matter 10 microns or less in size) and their precursors (gaseous ammonia
         (NH3), nitric oxide (NO), nitrogen dioxide (NO2), sulphur dioxide (SO2), and volatile organic
         compounds (VOCs) which participate in atmospheric photochemical reactions are included in the
         CEPA, 1999 Schedule 1 list of toxic substances which must be controlled.
    •    Continuous-Improvement and Keeping-Clean-Areas-Clean principles of the Canada-Wide Standards for
         Particulate Matter and Ozone, contains provisions for both federal and provincial governments to establish
         programs that apply pollution prevention and best management practices to minimize emissions of the
         pollutants and their precursors.
    •    The Canada-Wide Standards for Dioxins and Furans provide emission limits for the incineration of
         municipal solid waste.

Environmental Assessment as a Management Tool

Under CEAA, Environment Canada is responsible for the environmental assessment of certain activities related to
offshore oil and gas development. These responsibilities stem from the potential need for a Disposal at Sea Permit
(see Chapter 17). These responsibilities also stem from the potential need for certain permits or authorizations
under the Migratory Birds Regulations or Migratory Bird Sanctuary Regulations. Environment Canada is also
obligated to support other federal authorities responsible for the environmental assessment of offshore activities
through the provision of available information and expertise. Guidance related to consideration of some EC
information and expertise in an environmental assessment is reflected in the following documents:
    •    Migratory Birds Environmental Assessment Guidelines;
    •    Consideration of Climate Change in Environmental Assessment; and
    •    Wildlife Species at Risk and Environmental Assessment.

Under CEAA, adverse effects on species at risk, their critical habitats must be assessed. For any federal
environmental assessment of a project that is likely to affect a listed species or its critical habitat, SARA (s. 79)
requires that:
    •    written notification be provided to the responsible departments under the Act;
    •    adverse effects on a listed species and its critical habitat be identified;
    •    measures to avoid or lessen those effects be taken in a manner that is consistent with any applicable
         recovery strategy and action plans; and,
    •    the effects be monitored.

Environment Canada views environmental assessment as a key opportunity for Proponents to describe the due-
diligence provisions they will implement in siting, designing and managing a project so as to comply with


Newfoundland and Labrador Offshore Guide – January 2004                                                                 A-9
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

environmental legislation. In taking such an approach, environmental assessments can help facilitate and focus
subsequent approvals processes.

Fisheries and Oceans Canada (DFO and Minister of Fisheries & Oceans)
Fisheries and Oceans Canada (DFO) is responsible for policies and programs in support of Canada’s economic,
ecological and scientific interests84 in the oceans. DFO’s regulatory responsibilities in the offshore are administered
by Marine Environment and Habitat Management Division, Oceans Programs Division, and the Canadian Coast
Guard on the behalf of the Minister of Fisheries and Oceans.

The mandate of the DFO, Newfoundland and Labrador Region, Marine Environment and Habitat Management
Division (Habitat Management) is the conservation and protection of fish habitat through application of the habitat
provisions of the Fisheries Act with program guidance from the 1986 “Policy for the Management of Fish Habitat.”
The Division is also responsible for fulfilling the DFO legal responsibilities pursuant to the Canadian
Environmental Assessment Act.

Divisional activities include: assessment of proposed industrial developments in both the marine and freshwater
environments; issuance of Fisheries Act Authorizations for works or undertakings affecting fish habitat; negotiating
fish habitat compensation agreements; issuance of Letters of Advice on mitigation techniques to project developers;
and, various proactive initiatives engaging the public.

Under the Species at Risk Act (SARA), the Minister of Fisheries and Oceans is the competent Minister for listed
aquatic species including fish and marine plants. SARA prohibitions apply to aquatic species listed as extirpated,
endangered or threatened. For a complete description of the SARA legislation and the Canadian Environmental
Assessment Act (CEAA) see the Environment Canada and Canadian Environmental Assessment Agency sections
of this document.

The Canadian Coast Guard section of DFO (DFO-CCG) is mandated to:
     •   approve development applications for potential obstructions to navigable waters (s. 5(1), Navigable
         Waters Protection Act - see Chapter 16 of this Guide for details on approval process; and
     •   provide safe, economical and efficient movement of ships in Canadian waters through the provision of,
         inter alia:
         −    aids to navigation systems and services (such as Notice to Mariners),
         −    marine pollution prevention and response (s. 41, Oceans Act), and
         −    search and rescue operations, in coordination with the Department of National Defence (see
              description below under Department of National Defence).85

Pursuant to the Oceans Act, the Minister of Fisheries and Oceans fulfills a coordinating and facilitating role
between the various intergovernmental and intersectoral agencies through regional offices such as the Oceans
Programs Division in the Newfoundland Region. In particular, the Minister is required to:
     •   lead and facilitate the development and implementation of a national strategy for the management of
         Canadian waters (s. 29, Oceans Act);



84
   Some key scientific functions DFO performs in the offshore include: environmental monitoring, technological studies,
provisions of offshore research vessels to industry, and involvement with the Petroleum Exploration and Research
Development Group.
85
   See s. 1.24 of “National Search and Rescue Manual,” Department of National Defence, May 2000.


A-10                                               Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

     •   lead and facilitate the development and implementation of plans for the integrated management of all
         activities or measures in or affecting estuaries, coastal waters and marine waters that form part of Canada
         or in which Canada has sovereign rights under international law (ss. 31-33, Oceans Act);86
     •   lead and coordinate the development and implementation of a national system of marine protected areas
         (MPAs)87 (s. 35, Oceans Act); and
     •   make recommendations to the Governor in Council to make regulations prescribing MPAs and marine
         environmental quality requirements and standards (ss. 35(3) and 52.1, Oceans Act).88

The Minister is required to be guided by the following three principles when implementing the provisions of the
Oceans Act:
     •   sustainable development, refers to development that meets the needs of the present without compromising
         the ability of future generations to meet their own needs;
     •   integrated management of activities in estuaries, coastal waters and marine waters that form part of
         Canada or in which Canada has sovereign rights under international law; and
     •   precautionary approach, that is, erring on the side of caution (Preamble and s. 30, Oceans Act).

Entering into force in 1997, the Oceans Act is a relatively new statute. As such, the four duties as set out above
have yet to be fully developed and raise some questions regarding the regulatory process governing the
Newfoundland Offshore Area. However, DFO has stated that it will consult with stakeholders and affected parties
during the development of any initiatives related to any of its Oceans Act duties.

Human Resources Development Canada (HRDC)
As mentioned above under the CIC description, Human Resources Development Canada (HRDC) is responsible
for issuing an Employment Confirmation to CIC, advising that no Canadians or landed immigrants are qualified
and\or available to perform the job for which a Work Permit is sought. Pursuant to the Immigration Refugee
Protection Act (IRPA), HRDC’s role is to examine the employer, the foreign worker request and to recommend
to CIC whether the request for the foreign worker(s) is valid or not. Details on CIC’s regulatory role as well as the
process for obtaining HRDC’s Employment Confirmation are set out in CIC’s section above, and Chapter 21 of
this Guide, respectively.

It is important to note that all processes described in Chapter 21 are to be adhered to by all companies seeking the
admission of foreign workers to Canada. This includes companies who obtain contracts or sub-contracts in the
international marketplace and include a full or partial foreign worker complement in their bid.




86
   An example of an Integrated Management plan currently in development in Atlantic Canada is the pilot Eastern Scotian
Shelf Integrated Management (ESSIM) Project stretching from Lahave Basin to Laurentian Channel. See DFO,
“Integrated Management – Update March 2000 Eastern Scotian Shelf Integrated Management (ESSIM) Project” and
“Eastern Scotian Shelf Integrated Management (ESSIM) Project: Discussion Paper,” December 1999.
87
   An example of an area identified as an Area of Interest (AOI) for possible MPA designation is Gilbert Bay, located on
Labrador’s southeast coast.
88
   To date, no recommendations for marine environmental requirements and standards have been made to the Governor in
Council.


Newfoundland and Labrador Offshore Guide – January 2004                                                              A-11
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

Industry Canada (IC)
Industry Canada (IC) is a federal department which aims to foster a growing competitive, knowledge-based
Canadian economy. This includes:
       •    improving conditions for investment;
       •    improving Canada’s innovation performance;
       •    increasing Canada’s share of global trade; and
       •    building a fair, efficient and competitive marketplace.

Program areas include:
       •    developing industry and technology capability;
       •    fostering scientific research, setting telecommunications policy;
       •    promoting investment and trade;
       •    promoting tourism and small business development; and
       •    setting rules and services that support the effective operation of the marketplace.89

Industry Canada’s regulatory role in the offshore is two-fold. First, it plays an important role with respect to
industrial benefits and spinoffs from the various offshore activities. In Newfoundland and Labrador, IC provides
consultation to the CNOPB in relation to industrial benefits.

Secondly, pursuant to paragraph 5(1)(f) of the Radiocommunication Act,90 IC issues approvals of
radiocommunication sites in the offshore. Paragraph 5(1)(f) reads as follows:
            Subject to any regulations made under section 6, the Minister may, taking into account all matters that the
            Minister considers relevant for ensuring the orderly establishment or modification of radio stations and the
            orderly development and efficient operation of radiocommunication in Canada,

            (f) approve each site on which radio apparatus, including antenna systems, may be located, and approve
            the erection of all masts, towers and other antenna-supporting structures.

As paragraph 5(1)(f) of the Radiocommunication Act is included on the Canadian Environmental Assessment
Act’s Law List Regulations, once it is determined that a radiocommunication approval is needed pursuant to
paragraph 5(1)(f), the federal Environmental Assessment process under CEAA is triggered. See Chapter 15 for a
complete description of the CEAA process.

The Department has also signed an MOU entitled: “Memorandum of Understanding Concerning
Implementation of the Economic Growth and Development Provisions of the Atlantic Accord and the Canada-
Newfoundland Atlantic Accord Implementation Acts Among the Government of Canada, the Government of
Newfoundland and Labrador and the Canada-Newfoundland Offshore Petroleum Board.”




89
     For more details, see Industry Canada’s website, online at http://www.ic.gc.ca.
90
     R.S.C. 1985, c. R-2.


A-12                                                  Newfoundland and Labrador Offshore Guide – January 2004
                                       Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                             Approvals in the Newfoundland Offshore Area

Pursuant to the MOU, Industry Canada may be required to advise the Board on:
     •   employment benefits objectives and priorities relevant to offshore exploration, development, production
         and transportation activities;
     •   the nature and scope of departmental initiatives and programs affecting the supply of labour relevant to
         petroleum industry needs which are pursued or implemented separately from the Benefits Plan approval
         processes;
     •   employment and training aspects of Canada-Newfoundland Benefits Plans submitted to the Board for
         approval;
     •   difficulties that are being encountered, or are expected to be encountered, in employment, training and
         development of the skills of residents of Newfoundland and other Canadians;
     •   difficulties that are being encountered, or are expected to be encountered, in giving first consideration to
         residents of Newfoundland;
     •   availability and utilization of Newfoundland and other Canadian labour; and
     •   any concerns arising from governments’ review of designated contracts and procurements.

The Minister may also be asked to provide advice to assist the Energy Ministers in providing joint written
directives to the Board concerning the employment aspects of Canada-Newfoundland Benefits Plans and any of
the provisions thereof.

National Defence (DND)
The Department of National Defence (DND) is responsible for search and rescue operations in the offshore.91 In
order to effectively coordinate efforts with respect to SAR matters, the Interdepartmental Committee on Search
and Rescue (ICSAR) was created. ICSAR is responsible for identifying search and rescue requirements and
advising the government on how best to respond to these requirements. It is chaired by the Executive Director of
the National Search and Rescue Secretariat and consists of members from DND, DFO-CCG, Transport Canada
(Aviation), Environment Canada (Atmospheric Environmental Services), the RCMP, Heritage Canada (Parks
Canada), Department of Natural Resources, Department of Indian Affairs and Northern Development,
Emergency Preparedness Canada, Treasury Board, and the Privy Council Office.

Search and rescue operations in the offshore are the result of joint DFO-CCG and DND efforts. The two
agencies support the National Search and Rescue Program through two areas of activity related to aeronautical
and maritime search and rescue services:
     •   operations, aimed at detection, response and rescue; and
     •   prevention, aimed at reducing the number and severity of incidents through education and the enforcement
         of relevant regulations.92

There is no Memorandum of Understanding signed between the Department of National Defence and the Board,
and none currently exists. The Board has, however, established an Emergency Response Plan with both DND
and DFO-CCG. The Board also consults with DFO-CCG, which, in turn, coordinates search and rescue
activities with DND.




91
  See s. 1.8 of the “National Search and Rescue Manual,” Department of National Defence, May 1998, revised May 2000.
92
  See s. 1.12 of the “National Search and Rescue Manual,” Department of National Defence, May 1998, revised May
2000.


Newfoundland and Labrador Offshore Guide – January 2004                                                           A-13
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

National Energy Board (NEB)
The National Energy Board (NEB) is a federal agency with regulatory powers under the National Energy Board
Act and the Canada Oil and Gas Operations Act (COGOA). The NEB regulates:
     •   the certification of interprovincial and international pipelines;
     •   pipeline transportation, tolls and tariffs;
     •   exports of oil, natural gas and electricity; and
     •   frontier oil and gas activities offshore outside of the Accord area.

The NEB Act also requires that the NEB keep under review the Canadian supply of all major energy
commodities, with emphasis on electricity, oil, natural gas, and the by-products derived from oil and natural gas, as
well as the demand for Canadian energy in Canada and in export markets.

In general, with respect to offshore oil and gas exploration and production within the Accord areas, the NEB regulatory
responsibilities include:
     •   offshore pipelines from the point at which petroleum leaves the production platform to the processing
         plant;
     •   onshore processing plants where the plant and gathering pipeline are owned by the same party;93
     •   transboundary pipelines within Canada and internationally; and
     •   oil and gas industry activities on Frontier Lands outside of Accord areas, under COGOA.

Although there is no Memorandum of Understanding between the NEB and the Board, the NEB has signed an
MOU with the federal Department of Energy, Mines and Resources (now subsumed by the Department of
Natural Resources), see below under Natural Resources Canada.

Natural Resources Canada (Department and Minister of NRCan)
Natural Resources Canada (NRCan) is a department that specializes in energy, minerals and metals, forests and
earth sciences in the following four areas:
     •   conducting leading-edge science and technology research;
     •   building and maintaining a national knowledge infrastructure on Canada’s land and resources;
     •   ensuring that federal policies and regulations on issues such as the environment, trade, the economy, land,
         science and technology enhance the natural resources sector’s contribution to the economy; and
     •   promoting Canada’s international interests with respect to natural resources.94

The federal and Newfoundland and Labrador governments have established the C-NAAIA and the C-NAAINA
under mirror federal and provincial legislation. These Acts allow for offshore oil and gas operations to be jointly
managed. The CNOPB was established to manage and enforce the Accord legislation and related issues on behalf
of the governments. While the cost of operating the Board is shared equally by the two governments, the Board
operates autonomously from both governments. NRCan does, however, continue to work closely with the CNOPB
on a number of regulatory matters.




93
   For example, the NEB regulates both the plant and pipeline of the Sable Energy project as they are both owned by Sable
Offshore Energy Inc.
94
   NRCan has subsumed the Department of Energy, Mines and Resources.


A-14                                               Newfoundland and Labrador Offshore Guide – January 2004
                                       Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                             Approvals in the Newfoundland Offshore Area

The Minister of NRCan also exercises specific regulatory functions in the offshore of Newfoundland and
Labrador. Along with the provincial Minister of Natural Resources (see below), the Minister of NRCan is
responsible for:
    •    enacting legislation and regulations;
    •    reviewing CNOPB fundamental decisions for activities such as issuance of Call for Bids, drilling orders,
         mode of development, etc. This review function is described further in the text and charts of the Guide,
         where a fundamental decision is made;
    •    issuing directives to CNOPB. This function is described further in the text and charts of the Guide;
    •    coordinating Canada-Newfoundland benefits with CNOPB;
    •    approving annual operating budgets for the Board;
    •    approving strategic plans for rights issuance;
    •    tabling annual reports;
    •    reviewing any studies and policy advice submitted by the Board; and
    •    fixing tax rates for the Environmental Studies Research Fund (ESRF) once an Exploration Licence has
         been issued. The rates fixed by the federal Minister under section 80 of the Canada Petroleum Resource
         Act, they apply to the offshore area, are subject to approval by the Board.

Due to the wide variety of interest in offshore issues, it has been necessary for the various regulatory bodies involved
to negotiate Memoranda of Understanding to ensure that possible overlapping or conflicting jurisdictional issues
have been resolved to allow for effective application of regulations in the offshore. Although NRCan has been
named in several MOUs, the CNOPB negotiates the MOUs directly with the other party(ies). NRCan assumes
a participatory, rather than a regulatory role in this process.

The CNOPB has also had a Memorandum of Understanding with the Geological Survey of Canada, the science
division of NRCan since 1986. The MOU issues the GSC access to some confidential information and
documentation, so that it may carry out studies and analyses. Under the MOU, the CNOPB is expected to
provide designated GSC scientists, technicians and contractors access to geological, geophysical and drilling data.
The GSC, in turn, is expected to use this data to carry out micropaleontological, palyontological, sedimentological,
geochemical and other appropriate studies, and report their findings back to the Board. The GSC must also
provide the Board with access to seismic and other geophysical data and reports resulting from previous surveys,
well history reports and down-hole logs, samples from well cuttings, cores and reservoir fluids and with the results
of studies pertaining to the Newfoundland and Labrador Offshore Area. For example, pursuant to the MOU, the
Board requested and received the results of seismic surveying which the GSC had independently conducted in the
St. Pierre area. The MOU is currently being updated, and is expected to be concluded in the near future. While
some of the finer points of the MOU will be modified, no substantial changes to the MOU are anticipated.

Transport Canada – Marine Safety
Transport Canada - Marine Safety (TCMS) is dedicated to the safety of shipping and the protection of life,
property and the marine environment. It has regulatory authority in the Newfoundland and Labrador offshore
pursuant to the provisions of the Canada Shipping Act. Although the TCMS mandate does not cover installations,
gravity based production platforms, or accommodation installations, it does have regulatory powers relating to the
issuing of Certificates and Letters of Compliance for:
    •    Canadian flagged vessels;
    •    foreign flagged vessels;
    •    Mobile Offshore Drilling Units (MODUs); and
    •    standby vessels.




Newfoundland and Labrador Offshore Guide – January 2004                                                           A-15
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

In accordance with this Act, operators must obtain permits from Transport Canada for all vessels used in the
exploitation of oil and gas resources in the Newfoundland and Labrador Offshore Area. The permit required
depends upon the nature of the vessel for which permission is being sought.

The Canadian Coast Guard, while it was a division of TC, entered into a Memorandum of Understanding with
the CNOPB, the Department of Energy, Mines and Resources (now NRCan), the Newfoundland and Labrador
Department of Mines and Energy (now the Department of Natural Resources) and the Newfoundland and
Labrador Intergovernmental Affairs Secretariat concerning marine safety and the provision of related services in the
Newfoundland Offshore Area. The roles ascribed to Transport Canada include:
       •   consulting with the Board on any initiative to be taken concerning the making of regulations that apply to
           ships capable of engaging in the drilling for or production, conservation or processing of oil or gas;
       •   advising the Board concerning marine aspects of the safe conduct of operations and the integrity of
           offshore oil and gas facilities;
       •   advising the Board concerning contingency planning for and response to emergency situations;
       •   consulting with the Board on the development of guidelines pertaining to the marine aspects of oil and gas
           activities;
       •   consulting with the Board as soon as either party becomes aware of any marine accident, casualty or
           dangerous occurrence involving a MODU or vessel used in connection with oil and gas activity in the
           Newfoundland Offshore Area;
       •   conducting inspections of MODUs or vessels to determine the damage resulting from an accident or
           incident and the extent to which a Certificate issued pursuant to the Canada Shipping Act or a Letter of
           Compliance has been affected;
       •   enforcing the health and safety requirements for Canadian vessels on behalf of the Board, in cases where
           the Board makes these requirements applicable to such vessels;
       •   consulting with the Board about the priorities for research and development related to the safety of marine
           installations or structures used in connection with offshore oil and gas activities; and
       •   seeking and considering the views of the Board in formulating its position concerning proposals which
           affect oil and gas activities in the Newfoundland and Labrador Offshore Area at meetings of the
           International Maritime Organization.

This MOU is currently being updated to reflect the newly defined roles of the Canadian Coast Guard and
Transport Canada. At present, Transport Canada Marine Safety is responsible for matters relating to:
       •   Contingency planning (marine and environmental emergencies)95;
       •   Certification of marine installations used for oil and gas activities;
       •   Procedures in the event of accidents (vessels);
       •   Marine emergencies;
       •   Safety of navigation;
       •   Occupational health and safety;
       •   Standby vessel inspections;
       •   International relations/International Maritime Organization (IMO);
       •   Marine research and development; and
       •   Committee Representation.




95
     This duty continues to be shared with the Canadian Coast Guard.


A-16                                               Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

Transportation Safety Board of Canada (TSB)
The TSB has signed a Memorandum of Understanding with the CNOPB, to ensure effective coordination with
respect to all occurrences related to marine transportation aspects and the commodity pipeline transportation
aspects of offshore oil and gas operations, as defined by the Canadian Transportation Accident Investigation and
Safety Board Act.96 In particular, the Parties to the MOU are to:
       •   notify each other of any such transportation occurrence;
       •   exchange information on every occurrence reported;
       •   cooperate during the conduct concurrent investigations;
       •   coordinate media relations with respect to concurrent investigations;
       •   reimburse each other for expenses which are not part of those associated with each Participant’s normal
           investigation practices; and
       •   consult annually on their working relationship, investigations, and the need to amend the MOU.


PROVINCIAL REGULATORY AGENCIES

Newfoundland and Labrador Department of Natural Resources, Energy Branch
Energy Branch activities are expected to support provincial economic well-being and the best interests of
Newfoundland and Labrador citizens through its four main activities:
       •   petroleum resource development;
       •   petroleum project monitoring;
       •   electricity industry development; and
       •   policy and strategic planning.

Energy Branch carries out these functions through development, analysis and dissemination of relevant information,
and development and implementation of policy advice and supporting legislation, regulations, programs and
services. These functions are delivered throughout the province via Energy staff’s interactions with: energy industry
associations; electrical service providers; energy producers; provincial, national and international businesses actively
pursuing energy resource assessment and/or development; and those municipal, provincial, federal and federal-
provincial departments and organizations which share some aspect of Energy’s mandate.

Large scale resource development projects in the mining, oil and gas and energy sectors often provide significant
business and technology transfer opportunities for companies operating within Newfoundland and Labrador. The
goal of the Branch is to maximize the benefits to the local economy from the development of these major projects.
Focus is placed on securing a major share of development expenditures, employment and other value added
activities. Strategic positioning, benefits commitments negotiation and monitoring, strategy development and
implementation, and the identification, enhancement and international promotion of industrial capabilities are
essential elements of industrial benefits activities.

Energy Branch is responsible for provincial oversight of a number of pieces of legislation related to offshore oil and
gas exploration and development, including:
       •   Canada-Newfoundland and Labrador Oil & Gas Spills and Debris Liability Newfoundland Regulations;
       •   Certificate of Fitness Newfoundland Regulations;
       •   Offshore Area Oil & Gas Operations Regulations;

96
     R.S.C. 1985, c. C-23.4.


Newfoundland and Labrador Offshore Guide – January 2004                                                           A-17
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

    •    Offshore Area Petroleum Geophysical Operations Newfoundland Regulations;
    •    Offshore Area Petroleum Production and Conservation Regulations;
    •    Offshore Area Registration Regulations;
    •    Offshore Petroleum Drilling Newfoundland Regulations;
    •    Petroleum and Natural Gas Act;
    •    Newfoundland and Labrador Exploration Survey Regulations (including “Guidelines for Conducting
         Petroleum Exploration Surveys in the Newfoundland and Labrador Onshore Area”);
    •    BOP Classification System for Onshore Newfoundland and Labrador;
    •    Oil Royalty Regulations;
    •    Petroleum Drilling Regulations;
    •    Royalty Regulations 2003; and
    •    Petroleum Regulations.

The Petroleum Resource Development division is responsible for fostering the exploration, development and
production of the Province’s hydrocarbon resources, and providing related geological, geophysical, engineering and
regulatory services. Activities include:
    •    within the Province — issuing petroleum rights, processing applications for petroleum exploration
         programs, assessment of development options, drafting legislation and regulations relating to petroleum
         exploration and production;
    •    for the offshore area covered by the Atlantic Accord Act — drafting legislation and regulations in concert
         with the development of federal equivalents; and
    •    serving as an information source to the department’s executive, other governments and other government
         agencies, active and prospective members of the petroleum industry and to the general public.

Petroleum Projects Monitoring division is responsible for planning, development and implementing the fiscal
policies and procedures required for the administration and monitoring of all petroleum projects. Activities include:
    •    negotiation, preparation and development of Provincial petroleum fiscal agreements and related Provincial
         legislation;
    •    development and administration of the Province’s onshore and offshore petroleum royalty regulations;
    •    planning, coordinating and executing audits of project operators and owners;
    •    collection, monitoring and administration of revenues from these petroleum projects; and
    •    serving as an information source to the department’s executive, other government departments and
         agencies, active and prospective members of the petroleum industry, and to the general public.

Policy and Strategic Planning division is responsible for developing, planning and coordinating policy matters
relating to the Province’s energy sector, and maintaining formal administrative relations with the CNOPB.
Activities include:
    •    review and assessment of energy policy initiatives;
    •    assuring coordination in responses to related legislative and regulatory actions by other jurisdictions and
         agencies;
    •    coordinating energy-related activities of other Newfoundland departments, community relations initiatives
         and formulating and recommending departmental positions on energy issues including the Kyoto Protocol
         climate change and Canada’s Ocean Strategy.




A-18                                            Newfoundland and Labrador Offshore Guide – January 2004
                                        Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                              Approvals in the Newfoundland Offshore Area

For the offshore area covered by the Atlantic Accord Act, Energy Branch enacts provincial legislation and
regulations to parallel their federal equivalents. Also, in conjunction with the federal Minister of Natural
Resources, the Minister of Natural Resources is responsible for:
    •    reviewing CNOPB fundamental decisions issued by the CNOPB.(ss. 31-40, C-NAAIA); and
    •    issuing directives to the CNOPB (s.42, C-NAAIA).

Fundamental decisions which typically require the approval of both Ministers include:
    •    prohibiting the issuance of interests in certain areas (s. 54(1), C-NAAIA);
    •    prohibiting work or activity in the case of an environmental or social problem of a serious nature (s. 56(1),
         C-NAAIA);
    •    issuing an interest (s. 57(2), C-NAAIA);
    •    making a Call for Bids (s. 58(2), C-NAAIA);
    •    issuing an interest, without a Call for Bids (s. 61(1), C-NAAIA);
    •    setting the terms and conditions of an Exploration Licence (EL), other than those prescribed by the Act
         (s. 67(1), C-NAAIA);
    •    amending any provision of an EL (s. 68(1), C-NAAIA);
    •    consolidating two or more ELs into a single Exploration Licence (s. 68(3), C-NAAIA);
    •    making a Call for Bids and issuing a Significant Discovery Licence (SDL) where a Significant Discovery
         Area is extended to Crown reserve (s. 73(3), C-NAAIA);
    •    setting the terms and conditions of a SDL, other than those prescribed by the Act (s. 73(4), C-NAAIA);
    •    Drilling Orders (s. 76(1), C-NAAIA);
    •    Development Orders (s. 79, C-NAAIA);
    •    issuing a Production Licence (PL) to one interest owner in respect of two or more CDA’s; or, two or
         more interest owners in respect of one or more CDAs (s. 81(1)(b), C-NAAIA);
    •    making a call for bids, and issuing a PL where a CDA extends to Crown Reserve (s. 81(2), C-NAAIA);
    •    setting the terms and conditions of a PL, other than those prescribed by the Act (s. 81(4), C-NAAIA);
    •    consolidating two or more PLs into a single PL (s. 82, C-NAAIA);
    •    extending the term of a PL relating to commercial production (s. 84(4), C-NAAIA);
    •    cancelling of an interest, where the interest owner fails to comply to Board notice (s. 123(2), C-NAAIA);
    •    matters relating to former permits, special renewal permits and exploration agreements negotiated as ELs
         (s. 130(1), C-NAAIA);
    •    matters relating to former leases negotiated as ELs (s. 131(1), C-NAAIA);
    •    consolidating former permits, special renewal permits, exploration agreements, and leases into a single EL
         (s. 133(2), C-NAAIA);
    •    approving of Part 1 of a Development Plan (s. 139(4)(a), C-NAAIA); and
    •    approving an amendment to a Development Plan (s. 139(5), C-NAAIA).

Joint directives may be issued in relation to:
    •    fundamental decisions;
    •    dangerous or extreme weather conditions affecting the health or safety of equipment;
    •    Public Reviews - Potential Development of a pool or field;
    •    Canada-Newfoundland Benefits Plans and any of the provisions thereof; and
    •    studies to be conducted, and advice with respect to policy issues, given by the Board to Ministers.




Newfoundland and Labrador Offshore Guide – January 2004                                                         A-19
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

In addition, the provincial Minister is solely responsible for:
     •   applying provincial legislation and regulations of general application;
     •   exercising the option to acquire, by notice, petroleum during a shortage97 (s. 41(2), C-NAAIA);
     •   applying Newfoundland social legislation in its application to marine installations or structures
         (e.g. drilling unit, production platform) (s. 152(2), C-NAAIA);
     •   applying provincial labour law to a marine installation or structure that is permanently attached, anchored
         or resting on the seabed or subsoil of the offshore area (ss. 152(4)(b), C-NAAIA);
     •   establishing a review committee appointed by each government and the petroleum and fishing industries,
         to review and monitor the application of (ss. 162-163, C-NAAIA).
     •   applying the Newfoundland Consumption Tax Act (s. 207(3), C-NAAIA);
     •   applying The Insurance Companies Tax Act (s. 208(3), C-NAAIA); and
     •   applying the Newfoundland Income Tax Act (s. 211, C-NAAIA).

Newfoundland and Labrador Department of Environment
The Newfoundland and Labrador Department of Environment is mandated to protect, conserve and enhance the
province’s environment through the management of water resources, the Environmental Assessment of undertakings
and the control and management of substances and activities that may pollute the environment.

Its role in the offshore is governed by an MOU which the now defunct Department of Environment and Lands98
holds with the CNOPB, Environment Canada, the Canada Oil and Gas Lands Administration of the
Department of Energy, Mines and Resources (now NRCan), the Newfoundland and Labrador Department of
Energy (now the Department of Natural Resources), and the Newfoundland and Labrador Intergovernmental
Affairs Secretariat which dates back to 1988.

The MOU recognizes the Environment Department as a principal advisor to the Board regarding the
environmental sensitivity of the shore zone areas and the acceptable methods for the handling and onshore disposal
of waste materials generated by offshore oil and gas activities. The Environment Department is also represented on
the Board’s “Newfoundland Environmental Advisory Committee.” Through these roles, it may be consulted by
the Board in relation to:
     •   contingency planning and countermeasures response;
     •   the selection of sites and methods for the disposal onshore of debris resulting from the cleanup of oil spills
         associated offshore oil and gas activity, and of waste materials generated by offshore oil and gas activities;
     •   pollution incidents or other incidents affecting the quality of the environment;
     •   environmental emergencies;
     •   the development of procedural guidelines; and
     •   ensuring that provincial interests in relation to environmental issues are voiced to the Board on a regular
         and timely basis.

Pursuant to the MOU, the Board is expected to brief the Environment Department on a timely basis of matters
relating to:
     •   exploration licences and land relinquishments;
     •   marine seismic surveys;

97
   This is subject to arbitration in cases where the federal Minister of Natural Resources or the Production Licence holder
disagree with the provincial Minister’s initiative.
98
   The responsibilities delegated to the Department of Environment and Lands under the MOU have now been assumed by
the Department of Environment.


A-20                                               Newfoundland and Labrador Offshore Guide – January 2004
                                      Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
                                                            Approvals in the Newfoundland Offshore Area

    •    drilling program approvals;
    •    authorities to drill wells;
    •    contingency plans for marine emergencies;
    •    environmental studies; and
    •    production and transportation operations.

Newfoundland and Labrador Department of Labour
The mandate of the Department of Labour is to foster a positive labour relations climate which is conducive to
economic growth, competitiveness and prosperity and to promote and ensure safe, healthy workplaces wherein the
rights and interests of workers are protected and suitable benefits are derived. These goals are pursued through
proactive approaches to strengthen collaborative relationships among business, labour and government, programs to
enhance awareness of workplace issues and effective administration and enforcement of applicable legislation.

Department of Labour legislation establishes the rights and responsibilities of employers and employees in
Newfoundland and Labrador. In addition, it provides context for departmental policy and administrative activities:
    •    Labour Relations Act and Regulations;
    •    Labour Standards Act and Regulations;
    •    Shops Closing Act;
    •    Public Service Collective Bargaining Act;
    •    Fishing Industry Collective Bargaining Act;
    •    Interns and Residents Collective Bargaining Act;
    •    Teachers Collective Bargaining Act;
    •    Occupational Health and Safety Act and Regulations; and
    •    Radiation Health and Safety Act and Regulations.

Promoting a positive relationship between employers and employees and protecting their respective rights is the
responsibility of the Labour Branch. The Labour Standards and Labour Relations Divisions promote the
development of effective partnerships through delivery of a preventive mediation program, facilitation of the
collective bargaining process, and administration and enforcement of minimum standards of employment.

The Occupational Health and Safety (OHS) Branch is dedicated to promoting and protecting the health and
safety of workers through the province. Responsibilities include development and enforcement of occupational
health and safety legislation, inspection of workplaces and investigation of workplace complaints, serious accidents
and fatalities. The Workplace Health, Safety and Compensation Commission (WHSCC), which reports to the
Minister of Labour is charged with the promotion of workplace health and safety and prescribed training.

The Policy and Planning Branch leads the department’s activities with respect to strategic planning and
government accountability. It supports the Labour and OHS Branches in developing and maintaining programs,
policies and legislation which affect the workplace.

Newfoundland and Labrador Department of Fisheries and Aquaculture
The Department of Fisheries and Aquaculture contributes to economic and community growth in the province by
encouraging sustainable growth and development of industries involved in processing, producing, distributing and
marketing fish products produced in Newfoundland and Labrador for domestic and export markets. The
Department’s involvement in the offshore petroleum is determined by an MOU with the CNOPB, the
Department of Fisheries and Oceans, the Department of Energy, Mines and Resources, the Newfoundland




Newfoundland and Labrador Offshore Guide – January 2004                                                         A-21
Appendix A – Principal Regulatory/Advisory Agencies for Oil and Gas
Approvals in the Newfoundland Offshore Area

Department of Energy and the Newfoundland and Labrador Intergovernmental Affairs Secretariat. Pursuant to
this MOU, the Department may be consulted by the Board in relation to:
       •   the effects of offshore activities on fish, marine mammals and coastal environments;
       •   the drafting of guidelines required because of local fisheries or fish habitat conditions;
       •   environmental emergencies;
       •   pollution incidents, threats of pollution incidents or other incidents affecting fisheries, fish or fish habitat;
       •   the development and implementation of a compensation regime;
       •   facilitating consultation between the fishing industry and the oil and gas industry; and
       •   ensuring that provincial interests in relation to fisheries issues are voiced to the Board on a regular and
           timely basis.

The MOU also states that the Board is expected to brief the Department on a timely basis of matters relating to:
       •   exploration licences and land relinquishments;
       •   marine seismic surveys;
       •   drilling program approvals;
       •   authorities to drill wells;
       •   contingency plans for marine emergencies;
       •   environmental studies; and
       •   production and transportation operations.

The Department is represented on the Board’s Environmental Advisory Committee, which offers ongoing
consultation to the Board.

Workplace Health, Safety and Compensation Commission of Newfoundland and
Labrador
The Workplace Health, Safety and Compensation Commission is an employer-funded no fault insurance system
that promotes safe and healthy workplaces, protects employers from the full cost of accidents at their workplace,
provides return-to-work programs and fair compensation to injured workers and their dependants.99 Under the
Workplace Health, Safety and Compensation Act, the Commission is mandated to provide workplace insurance
and to promote health and safety in the workplace.100 Some operators providing employment in the Newfoundland
Offshore Area may be required to register with the Commission and should contact the Commission directly for
information on registration requirements.




99
     See Commission’s mandate online at <http://www.whscc.nf.ca/aboutus.htm> (date accessed: April 4, 2001).
100
      Workplace Health, Safety and Compensation Act, R.S.N. 1990, c. W-11, as amended.


A-22                                                Newfoundland and Labrador Offshore Guide – January 2004
                                                                   Appendix B – List of Agency Contacts



APPENDIX B – LIST OF AGENCY CONTACTS

Joint Federal-Provincial Agencies

      AGENCY                 CONTACT                 MAILING ADDRESS                  NUMBERS
Canada-Newfoundland      General Office         th
                                               5 Floor, TD Place                 Tel: (709) 778-1400
Offshore Petroleum                             140 Water Street                  Fax: (709) 778-1473
Board                                          St. John's, NF A1C 6H6
Canada-Nova Scotia       General Office        6th Floor, TD Centre              Tel: (902) 422-5588
Offshore Petroleum                             1791 Barrington St.               Fax: (902) 422-1799
Board                                          Halifax, NS B3J 3K9

Federal Agencies

      AGENCY                CONTACT                  MAILING ADDRESS                  NUMBERS
Canadian                 Regional Liaison &    13th Floor, Fontaine Bldg.        Tel: (819) 997-2254
Environmental            Guidance              200 Sacre-Coeur Blvd.             Fax: (810) 997-4931
Assessment Agency                              Hull, Quebec K1A 0H3
                         Regional Director,    TD Centre, Suite 1030             Tel: (902) 426-0564
                         Atlantic Region       1791 Barrington St.               Fax: (902) 426-6550
                                               Halifax, NS B3J 3L1
Canadian                 Marine Complaints     Terrasses de la Chaudiere         Tel: 1-888-222-2592
Transportation Agency    and Investigations,   15 Eddy Street                    Fax: (819) 953-5686
                         Rail and Marine       Hull, Quebec K1A 0N9
                         Branch
Canada Border            Customs Program       171 Slater St., 7th Floor         Tel: (613) 954-7198
SErvices Agency                                Ottawa, ON K1A 0L5                Fax: (613) 957-9717
Citizenship and          Employment Office     31 Pippy Place                    Tel: (709) 772-2849
Immigration Canada                             St. John’s, NF                    Fax: (709) 772-2929
Department of National   Public Affairs,       P.O. Box 99000                    Tel: (902) 427-6688
Defence                  Maritime Forces       Stn. Forces                       Fax: (902) 427-2218
                         Atlantic              Halifax, NS B3K 5X5
Environment Canada       Environmental         Queen Square                      Tel: (902) 426-2308
                         Protection Branch,    45 Alderney Drive
                         Regional              Dartmouth, NS B2Y 2N6
                         Headquarters
                         Environmental         6 Bruce Street                    Tel: (709) 772-5488
                         Protection Branch,    Mt. Pearl, NF A1N 4T3             Fax: (709) 772-5097
                         Provincial Manager




Newfoundland and Labrador Offshore Guide – January 2004                                            B-1
Appendix B – List of Agency Contacts



      AGENCY                CONTACT                 MAILING ADDRESS                     NUMBERS
                        Newfoundland             Second Floor, Gander Airport      Tel: (709) 256-6611
                        Weather Centre           P.O. Box 370
                                                 Gander, NF A1V 1W
Fisheries and Oceans    Science, Oceans and      P.O. Box 1035                     Tel: (709) 772-2027
Canada                  Environment Branch       Dartmouth, NS B2Y 4T3
                        Newfoundland
                        Region
                        Marine Environment       Northwest Atlantic Fisheries      Tel: (709) 772-2442
                        and Habitat              Centre                            Fax: (709) 772-5562
                        Management               East White Hills Road Extension
                        Division                 St. John’s, NF A1C 5X1


                        Oceans Programs          Northwest Atlantic Fisheries      Tel: (709)772-2000
                        Division                 Centre
                                                 East White Hills Road Extension
                                                 St. John’s, NF A1C 5X1
                        Regional Director,       P.O. Box 5667                     Tel: (709) 772-4423
                        Canadian Coast           Southside Road                    Fax: (709) 772-4880
                        Guard                    St. John's, NF
                                                 A1C 5X1
                        Reporting Environmental Emergencies: 1-800-563-2444 (outside the St. John's
                        area) or 772-2083 (within the St. John's area).
National Energy Board   Chief Conservation       444 Seventh Ave. SW               Tel: (403) 299-2792
                        Officer                  Calgary, AB T2P 0X8               Fax: (403) 292-5503
                        Secretary to the         444 Seventh Ave. SW               Tel: (403) 299-2731
                        Board                    Calgary, AB T2P 0X8               Fax: (403) 292-5503
Natural Resources       Frontier Lands           17B5, 580 Booth St.               Tel: (613) 995-0136
Canada                  Management               Ottawa, ON K1A 0E4                Fax: (613) 943-2274
                        Division
Transport Canada        Marine Safety            10 Barter's Hill                  Tel: (709) 772-6197
                                                 PO Box 1300, John Cabot
                                                 Bldg.
                                                 St. John's, NF A1C 6H8




B-2                                          Newfoundland and Labrador Offshore Guide – January 2004
                                                                   Appendix B – List of Agency Contacts


Provincial Agencies

     AGENCY                 CONTACT                 MAILING ADDRESS                  NUMBERS
Newfoundland and         Main Office            4th Floor, West Block           Tel: (709)729-2664
Labrador Department of                          Confederation Building          Fax: (709) 729-6639
Environment                                     P.O. Box 8700
                                                St. John’s, NF A1B 4J6
                         Environmental Assessment                               Tel: : (709) 729-2562
                                                                                Fax: (709) 729-5518
                         Pollution Prevention                                   Tel: (709) 729-5782
                                                                                Fax: (709) 729-6969
Newfoundland and         Main Office            4th Floor, West Block           Tel: (709) 729-7420
Labrador Department of                          Confederation Building          Fax: (709) 729-3445
Labour                                          P.O. Box 8700
                                                St. John’s, NF A1B 4J6
                         Labour Relations       3rd floor, Beothuck Building    Tel: (709) 729-2711
                         Division               20 Crosbie Place
                                                                                Fax: (709) 729-5738
                                                P.O. Box 8700
                         Labour Relations       St. John’s, NF A1B 4J6          Tel: (709) 729-2707
                         Board
                                                                                Fax: (709) 729-5738
                         Labour Standards                                       Tel: (709) 729-2743
                         Division
                                                                                Fax: (709) 729-5738
                         Workplace Health &     P.O. Box 8700                   Tel: (709) 729-2706
                         Safety Inspections     St. John’s, NF A1B 4J6          Fax: (709) 729-3445
                         Division
                         Report a serious workplace accident: (709) 729-4444
Newfoundland and         Main Office            Petten Building                 Tel: (709) 729-3723
Labrador Department of                          30 Strawberry Marsh Road
Fisheries and                                   P.O. Box 8700
Aquaculture.                                    St. John’s, NF A1B 4J6
Newfoundland and         Main Office            Natural Resources Building      Tel: (709) 729-4715
Labrador Department of                          50 Elizabeth Ave.               Fax: (709) 729-2076
Forest Resources and                            P.O. Box 8700
Agrifoods                                       St. John’s, NF A1B 4J6
Newfoundland and         Energy Branch,         Natural Resources Building      Tel: (709) 729-2323
Labrador Department of   Petroleum Resource     50 Elizabeth Ave.               Fax: (709) 729-2508
Natural Resources        Development            P.O. Box 8700
                         Division               St. John’s, NF A1B 4J6




Newfoundland and Labrador Offshore Guide – January 2004                                               B-3
Appendix B – List of Agency Contacts



      AGENCY                  CONTACT                 MAILING ADDRESS                  NUMBERS
                          Regulatory Affairs, Petroleum Resource Development      Tel: (709) 729-2778
                          Division                                                Fax: (709) 729-2508
                          Petroleum Products Monitoring Division, Energy Branch   Tel: (709) 729-2624
                                                                                  Fax: (709) 729-2508
                          Bull Arm Site            P.O. Box 8700                  Tel: (709) 729-0114
                          Corporation              St. John’s, NF A1B 4J6         Fax: (709) 729-1699
Workplace Health,         St. John’s Office        146 - 148 Forest Rd.           Tel: (709) 778-1000
Safety and                                         P.O. Box 9000                  Fax: (709) 738-1714
Compensation                                       St. John’s, NF A1A 3B8
Commission of
Newfoundland and
Labrador

Other Contacts

       AGENCY                 CONTACT                  MAILING ADDRESS                 NUMBERS
Atlantic Canada           Executive Director       Dalhousie University           Tel: (902) 494-3726
Petroleum Institute                                Weldon Law Bldg.               Fax: (902) 494-2489
                                                   6061 University Ave.
                                                   Halifax, NS B3H 4H9
Canadian Association of   Environment and          2100, 350-7th Ave. SW          Tel: (403) 267-1100
Petroleum Producers       Operations               Calgary, AB T2P 3N9            Fax: (403) 266-3214
                          Newfoundland             Suite 900,                     Tel: (709) 724-4200
                          Office                   235 Water Street               Fax: (709) 724-4225
                                                   St. John’s, NF A1C 1B6




B-4                                            Newfoundland and Labrador Offshore Guide – January 2004
                                                                               Appendix C – Reference Material



APPENDIX C – REFERENCE MATERIAL

The following is a listing of the organizations whose documents were referenced in writing this draft.


CANADA-NEWFOUNDLAND OFFSHORE PETROLEUM BOARD

Rights Issuance
Right’s Issuance Process, Newfoundland Offshore Area
Procedures Regarding Applications for Significant and Commercial Discovery Declarations and Amendments
Criteria for a Significant or Commercial Discovery Declaration


General
Canada-Newfoundland Offshore Petroleum Board Emergency Response Plan, September 1, 1999.


Memoranda of Understanding
Memorandum of Understanding Concerning Marine Safety and the Provision of Related Services in the
Newfoundland Offshore Area. Signed December 1, 1989.
Signatories: the Canada-Newfoundland Offshore Petroleum Board, the Canadian Coast Guard, The
Department of Energy, Mines and Resources, The Newfoundland and Labrador Department of Mines and
Energy (now the Department of Natural Resources) and the Newfoundland and Labrador Intergovernmental
Affairs Secretariat

Memorandum of Understanding Concerning the Protection of Fisheries and the Provision of Ocean Related
Services in the Newfoundland Offshore Area. Signed April 21, 1988
Signatories: the Canada-Newfoundland Offshore Petroleum Board, the Department of Fisheries and Oceans, the
Department of Energy, Mines and Resources, the Newfoundland and Labrador Department of Fisheries, the
Newfoundland and Labrador Department of Energy and the Newfoundland and Labrador Intergovernmental
Affairs Secretariat

Memorandum of Understanding Concerning the Provision of Environmental Services in the Newfoundland
Offshore Area. Signed April 21, 1988.
Signatories: the Canada-Newfoundland Offshore Petroleum Board, Environment Canada, the Department of
Energy, Mines and Resources, the Newfoundland and Labrador Department of Environment and Lands, the
Newfoundland and Labrador Department of Energy and the Newfoundland and Labrador Intergovernmental
Affairs Secretariat




Newfoundland and Labrador Offshore Guide – January 2004                                                   C-1
Appendix C – Reference Material


Memorandum of Understanding Concerning the Administration of Legislation Related to the Occupational
Health and Safety of Workers in the Newfoundland Offshore Area. Signed August 31, 1989.
Signatories: the Canada-Newfoundland Offshore Petroleum Board, the Newfoundland and Labrador
Department Employment and Labour Relations (now the Department of Labour), the Newfoundland and
Labrador Department of Mines and Energy (now the Department of Natural Resources), the Newfoundland and
Labrador Intergovernmental Affairs Secretariat and the Department of Energy, Mines and Resources
(COGLA).

Memorandum of Understanding Concerning Implementation of the Economic Growth and Development
Provisions of the Atlantic Accord and the Canada-Newfoundland Atlantic Accord Implementation Acts. Signed
July 25, 1989.
Signatories: the Government of Canada, the Government of Newfoundland and Labrador and the Canada-
Newfoundland Offshore Petroleum Board

Memorandum of Understanding Between the Canada-Newfoundland Offshore Petroleum Board and the
Geological Survey of Canada. Signed December 17, 1986, to establish guidelines and procedures to ensure close
cooperation.
Signatories: the Canada-Newfoundland Offshore Petroleum Board and the Geological Survey of Canada.


Memorandum of Understanding Concerning the Environmental Assessment of the Terra Nova Development,
(June 17, 1996).
Signatories: the Canada-Newfoundland Offshore Petroleum Board, the Minister of the Environment of the
Government of Canada, the Minister of Natural Resources of the Government of Canada, The Minister of
Environment and Labour of the Government of Newfoundland and Labrador, The Minister of Mines and Energy
of the Government of Newfoundland and Labrador, and the Premier as Minister Responsible for
Intergovernmental Affairs of the Government of Newfoundland and Labrador.


Memorandum of Understanding Between the Canada-Newfoundland Offshore Petroleum Board and Canadian
Transportation Accident Investigation and Safety Board. June 26, 1996.


Memorandum of Understanding Between the Canada-Newfoundland Offshore Petroleum Board and the Diver
Certification Board of Canada concerning the Certification for Commercial Divers pursuant to the Newfoundland
Offshore Area Petroleum Diving Regulations, November, 2002.



CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS

Excerpts of a document outlining general oil and gas exploration, development, production and decommissioning.
“Offshore Oil and Gas Development in Atlantic Canada: Present and Future,” subtitle: “Offshore Legal and
Regulatory Regimes in Atlantic Canada.”
“Summary of Exploration, Exploration Drilling, Delineation, Development, Production, Working with the
Fishing Industry, Environmental, Health and Safety Management and Economic Benefits.”


C-2                                          Newfoundland and Labrador Offshore Guide – January 2004
                                                                           Appendix C – Reference Material


CANADIAN ENVIRONMENTAL ASSESSMENT AGENCY

General
“The Canadian Environmental Assessment Agency – Description” online at:
http://www.ceaa-acee.gc.ca/0003/index_e.htm (date accessed: July 6, 2000).
Environmental Assessment Process (flowchart used for internal purposes).
Review of the Canadian Environmental Assessment Act: A Discussion Paper for Public Consultation, December
1999, online at: < http://www.ceaa-acee.gc.ca/013/001/0002/0003/factsheet_e.htm > (date accessed: July 11,
2000)



CANADIAN TRANSPORTATION AGENCY

The Canadian Transportation Agency and the Coasting Trade Act.
Canadian Transportation Agency, Annual Report 1999: Moving with the Times.
The Canadian Transportation Agency’s Marine Mandate.
Coasting Trade Act Presentation to Stakeholders, November 1995.
CTA – OTC Rail and Marine Complaints and Audit Services.
Memorandum on Temporary Importation of Vessels, March 9, 1995, Appendix C – “Guidelines for Completing
an Application for Vessel Temporary Admission to the Coasting Trade of Canada pursuant to the Coasting Trade
Act and the Vessel Duties Reduction or Removal Regulations,” online at: http://www.cbsa-
asfc.gc.ca/E/pub/cm/d3-5-7/d3-5-7-e.html.



CASE LAW

Mobil Oil Canada Ltd. v. Canada-Newfoundland Offshore Petroleum Board [1994] 1 S.C.R. 202.
Union of Nova Scotia Indians v. Maritimes and Northeast Pipeline Management Ltd. [1999] F.J.C. No. 242.
Union of Nova Scotia Indians v. Maritimes and Northeast Pipeline Management Ltd. [1999] F.J.C. No. 1546.
Union of Nova Scotia Indians v. Nova Scotia (Attorney General) [1999] N.S.J. No. 270.




Newfoundland and Labrador Offshore Guide – January 2004                                                   C-3
Appendix C – Reference Material


ENVIRONMENT CANADA

General
Environment Canada Policy Framework on Environmental Performance Agreements
Draft EPB and the Offshore.
Draft Notes on Fisheries Act and Migratory Bird Convention Act Regulations.
Draft 2 Environment Canada and the Oil and Gas Industry: What is our role? (July 3, 1998).
Newfoundland and Labrador Disposal at Sea Program.



DEPARTMENT OF CANADIAN HERITAGE

Guiding Principles and Operational Policies (Hull: Minister of Supply & Services Canada, 1994)
Diver Certification Board of Canada, Mission, Governance and Accreditation Information.



FISHERIES AND OCEANS CANADA

Coast Guard
“Marine Navigation Services Navigable Waters Protection Act Application Guide.”
Marine Navigation Services, online at: < http://www.notmar.com/eng/index.php > (date accessed: June 27,
2000).
Notices to Mariners (NOTMAR), online at: <http://www.notmar.com/eng/index.php > (date accessed: June
27, 2000).
Notices to Mariners Eastern Edition, vol. 25, (June 30, 2000), online at: <http://www.notmar.com> (date
accessed: June 27, 2000).

Marine Environment and Habitat Management Division
“Decision Framework for the Determination and Authorization of Harmful Alteration, Disruption or Destruction
of Fish Habitat” (Ottawa: DFO, 1998).
Draft Notes on Fisheries Act and Migratory Bird Convention Act Regulations.
“Fish Habitat Conservation and Protection – Guidelines for Attaining No Net Loss” (Ottawa: DFO, 1995).
“Fish Habitat Conservation and Protection – What the Law Requires: The Directive on the Issuance of
Subsection 35(2) Authorizations” (Ottawa: DFO, 1995).
“Freshwater Intake End-of-Pipe Fish Screen Guideline” (Ottawa: DFO, 1995).
“A Guide to the Implementation of CEAA” (DFO’s Marine Environment and Habitat Directorate, 1995 –
under revision).




C-4                                         Newfoundland and Labrador Offshore Guide – January 2004
                                                                            Appendix C – Reference Material


“Habitat Conservation and Protection Guidelines Developed from the Policy for the Management of Fish
Habitat” (1986), 1998 2nd ed., (Ottawa: DFO, 1998)
“Policy for the Management of Fish Habitat,” published 1986, reprinted 1991.
Summary – Fish Habitat Management Policy (Ottawa: DFO, 1990).
D.G. Wright & G.E. Hopky, “Guidelines for the Use of Explosives In or Near Canadian Fisheries Waters,”
Canadian Technical Report of Fisheries and Aquatic Sciences 2107, 1998.



HUMAN RESOURCES DEVELOPMENT CANADA

“Foreign Worker Recruitment Policy,” revised 24-05-00.
“Validation Process for Very Short Term Foreign Workers.”



NATIONAL DEFENCE CANADA

“National Search and Rescue Manual,” May 1998, revised May 2000.



NATIONAL ENERGY BOARD

General
Publications, online at: < http://www.neb-one.gc.ca/publications/index_e.htm > (date accessed: June 26,
2000). – consists of a comprehensive listing of all NEB publications, including: Acts, Regulations, Rules,
Guidelines, Guidance Notes and Memoranda of Guidance.

Memorandum of Understanding Between the National Energy Board and the Department of Energy, Mines and
Resources.
Signatories: the National Energy Board and the Newfoundland Department of Energy, Mines and Resources
(now the Government of Newfoundland and Labrador Department of Natural Resources).



NATURAL RESOURCES CANADA

Arbitration Panel to Determine Offshore Line between Newfoundland and Nova Scotia, Press Release, May 31,
2000.
Natural Resources Canada & Nova Scotia Petroleum Directorate, Georges Bank Review Panel (Halifax:
Georges Bank Review Panel, June 1999); online at:
http://www.gov.ns.ca/petro/referencelibrary/dsp_displayDetails.asp?documentID=121




Newfoundland and Labrador Offshore Guide – January 2004                                                      C-5
Appendix C – Reference Material


Governments of Canada and Nova Scotia, “Georges Bank Moratorium Extended” Press Release (December 22,
1999), online at: http://www.nrcan-rncan.gc.ca/media/newsreleases/1999/1999115_e.htm


PETROLEUM COMMUNICATION FOUNDATION

Canada’s East Coast Offshore Oil and Gas Industry, A Backgrounder, PCF-E-BKOF-1999.
Did You Know? Nova Scotia Petroleum Industry Fast Facts, PCF-E-DYNS-1999.
The Oil and Gas Industry and the Canadian Economy, A Backgrounder, February 1999.
Our Petroleum Challenge, 6th Edition, (Subtitled: Exploring Canada’s Oil and Gas Industry), 1999.



MISCELLANEOUS SOURCES

Miriam Bradbury & Dave Taylor, “Roadmap for Newfoundland Offshore Petroleum Projects (Draft, 1998).”
P.M. Chapman, Federalism and Free Enterprise in the Regulation of Petroleum Resources on Canada’s
Continental Shelf, LLM Thesis (Halifax: Dalhousie University, 1988). KB 57.04 C46
B.B. de Jonge, Law on Pollution and Debris from Oil and Gas Drilling and Production Operations Offshore Nova
Scotia, LLM Thesis (Halifax: Dalhousie University, 1998). KB 79.W3 D32
Erlandson & Associates Consultants, Oil and Gas Approvals in the Northwest Territories – Southern Mackenzie
Valley for the Canadian Association of Petroleum Producers and Indian and Northern Affairs Canada, October,
2000.
Newfoundland and Labrador Disposal at Sea Program (Brochure).
United Nations Convention on the Law of the Sea, December 10, 1982, U.N. Doc. A/CONF.62/122,
reprinted in (1982) 21 I.L.M. 1281




C-6                                         Newfoundland and Labrador Offshore Guide – January 2004
                                                        Appendix D – Emergency Response Plan Procedures
                                                                       in the Newfoundland Offshore Area

APPENDIX D – EMERGENCY RESPONSE PLAN PROCEDURES IN THE
NEWFOUNDLAND AND LABRADOR OFFSHORE AREA


PLAN ACTIVATION AND LEVELS OF RESPONSE
The Emergency Response activities of the Board have been delegated to the Chief Executive Officer (CEO), who
has been designated as the Emergency Response Officer, and the Safety Manager, who holds the position of Chief
Safety Officer (CSO).

Upon becoming aware of an emergency situation, the CSO or his/her designate (such as the Emergency Response
Officer (ERO), or the Duty Officer if the ERO is unavailable, will activate the Board’s emergency response
procedures, as described below. The following is a summary of the Board’s emergency response policy. Operators
are advised to consult the Board’s publication “Emergency Response Plan, September 1, 1999” to ensure
compliance with the various requirements.

An emergency situation is defined as any situation which gives rise to the activation of an Operator’s Emergency
Response Plan. Once activated, this plan is intended to provide for a Board response to the situation at one of the
following three hierarchical levels:

Level One:       (i) Monitoring of the Operator’s response to ensure compliance with regulations and conformity
                       to approved contingency plans and supporting documentation;
                 (ii) Notification of other government departments and agencies as appropriate; and/or
                 (iii) Preparation for Level Two and Level Three Response.

Level Two:       (i) Assumption of responsibility for environmental protection and/or restoration operations.

Level Three: (i) Issuance of orders related to “dangerous operations” (Stop Work Order); and/or
             (ii) Assumption of responsibility for control of operations other than, or in addition to,
                  environmental protection/restoration.

Only the Chief Conservation Officer can activate a Level Two response and only the Chief Safety Officer can
activate a Level Three response. While any Safety Officer may issue a “Stop Work Order” the CSO should, if at
all possible, be consulted first. In any event, the CSO must be notified as soon as possible.


AGENCY RESPONSIBILITIES
The Board has the direct responsibility for government response in all petroleum-related emergency situations in
the Newfoundland and Labrador offshore area except:
(i)     Search and Rescue related incidents which are controlled by the Rescue Coordination Centre (RCC) in
        Halifax or by the Marine Rescue Sub-Centre (MRSC) in St. John’s;
(ii)    incidents involving criminal activity or accidental death where an investigation may be initiated by the
        RCMP; and
(iii)   oil spills or other pollution from ships, which are the responsibility of the Canadian Coast Guard (CCG).

As the responsible agency, the Board will monitor the emergency situation and may, where necessary, assume
control of offshore and related operations.


Newfoundland and Labrador Offshore Guide – January 2004                                                         D-1
Appendix D – Emergency Response Plan Procedures
in the Newfoundland Offshore Area


The Board is also responsible for measures such as ensuring contingency plans are in place; recovery, where
appropriate, of the costs incurred by governments in intervening in an emergency situation; and, liaison with other
agencies whose expertise or equipment may be required during the management of an emergency. These other
agencies, whether at the federal, provincial or municipal level, are referred to, in this plan, as “resource agencies”
and their support may be enlisted in accordance with contingency planning arrangements and various MOUs.

In situations where the Board does not have direct responsibilities, it will continue to monitor the situation in order
to fulfill its obligations pursuant to the legislation and, if necessary to act as a resource to other agencies in
accordance with the provisions of the various MOUs.


EMERGENCY PRIORITIES
All countermeasure operations, whether undertaken by the Board or an Operator should dedicate resources in
accordance with the following priorities:
      (i)         human safety;
      (ii)        maintenance and preservation of property, i.e. facilities such as drilling installations vessels and
                  equipment to prevent further deterioration of the situation or to undertake priority items (iii) and (iv);
      (iii)       well control operations; and
      (iv)        environmental protection and restoration.


THE REGIONAL ENVIRONMENTAL EMERGENCY TEAM
The Regional Environmental Emergency Team (REET) is established and chaired by Environment Canada to
provide, in emergency situations, advisory services on matters relating to environmental protection and on setting
priorities for environmental restoration efforts. It is composed of technical representatives from appropriate federal
and provincial agencies. REET may be activated upon request from either industry or government.

REET includes representatives from:
      •       the Canada-Newfoundland Offshore Petroleum Board;
      •       the Rescue Coordination Centre of the Canadian Armed Forces;
      •       the Canadian Coast Guard (Marine Rescue Sub-Centre);
      •       the Canadian Coast Guard (Rescue, Safety and Environmental Response);
      •       Environment Canada (Environmental Protection Branch);
      •       Environment Canada (Atmospheric Environment Branch);
      •       the Department of Fisheries and Oceans (Marine Environment and Habitat Management Division);
      •       the Department of Fisheries and Oceans (Atlantic and Marine Operations, Fish Habitat Management
              Branch);
      •       Natural Resources Canada (Frontier Lands Management Division);
      •       the Newfoundland and Labrador Department of Environment and Labour; and
      •       the Newfoundland and Labrador Department of Government Services and Lands.




D-2                                                  Newfoundland and Labrador Offshore Guide – January 2004
                                                    Appendix E – Occupational Safety and Health Framework
                                                                        in the Newfoundland Offshore Area

APPENDIX E – OCCUPATIONAL SAFETY AND HEALTH FRAMEWORK IN
THE NEWFOUNDLAND AND LABRADOR OFFSHORE AREA

Three distinct bodies of occupational health and safety legislation may be applicable in the Newfoundland and
Labrador Offshore Area. The regulations that apply will depend on the nature of the operations that are being
undertaken. This appendix provides a brief description of each these regulations.

1)       Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November
         1989)
Notwithstanding subsection 123(1) of the Canada Labour Code or any other Act of Parliament:
a) Parts II and III of the Canada Labour Code do not apply on any marine installation or structure referred to in
   paragraph 152(4)(a) of the C-NAAIA; and

b) in respect of any marine installation or structure referred to in subsection 152(1) that is within the offshore
   area for the purpose of becoming, or that is, permanently attached to, permanently anchored to or permanently
   resting on the seabed or subsoil of the submarine areas of the offshore area, Part I of the Canada Labour Code
   does not apply (s. 152(4)(b), C-NAAIA).

Instead, procedures and equipment aboard any installation used in the Newfoundland and Labrador Offshore
Area must be in compliance with the Board’s Petroleum Occupational Safety and Health Regulations,
Newfoundland (Draft November 1989), which closely parallel the requirements of the Canada Labour Code. The
Board must be satisfied that the operation complies with these regulations and can be undertaken safely before it
will issue a Work Authorization. To this end, the Board’s Chief Safety Officer Board is required to conduct a
thorough review of all aspects of the project to ensure that all safety issues have been addressed.
Once the operation has commenced, any loss of life, serious injury, hazardous occurrence or significant event must
be immediately reported to the Board’s Chief Conservation Officer and to the Chief Safety Officer. This is done
by submitting a completed Hazardous Occurrences Notification Form to the Board. Also, summaries of accident
statistics in drilling operations must be provided monthly to the Board by submitting Monthly Lost Time Accidents
Statistics Report forms (s. 145(1) Newfoundland Offshore Drilling Regulations).

2)       Occupational Health and Safety Act and Other Newfoundland and Labrador Social
         Legislation
Pursuant to subsection 152(2) of the C-NAAIA, Newfoundland and Labrador social legislation and any
regulations made thereunder apply on any marine installation or structure that is within the offshore area in
connection with the exploration or drilling for or the production, conservation or processing of petroleum in the
offshore area. The applicability of this legislation is, however, subject to the exemptions described in subsection
152(3) of the Act.

Newfoundland and Labrador social legislation refers to legislation administered by:
     •   Newfoundland and Labrador Department of Government Services and Lands, which administers the
         Boiler, Pressure Vessel and Compressed Gas Act and Elevators Act; and
     •   Newfoundland and Labrador Department of Labour, which administers the Labour Standards Act,
         Occupational Health and Safety Act, Radiation Health and Safety Act, and Workplace Health, Safety
         and Compensation Act.



Newfoundland and Labrador Offshore Guide – January 2004                                                               E-1
Appendix E – Occupational Safety and Health Framework
in the Newfoundland Offshore Area

Social legislation may also include any other Act of the Legislature of the province, as amended from time to time,
as may be prescribed.

The Board’s safety inspectors have been appointed by the Newfoundland and Labrador Minister of Labour. In
this role, they are authorized to carry out safety inspections in relation to the relevant sections of the Newfoundland
and Labrador Occupational Health and Safety Act. This includes provisions of the Act concerning the right to
refuse unsafe work and the requirement to establish and train occupational health and safety committees or
occupational health and safety representatives, depending on the size of the company. In addition, the Department
of Labour, Labour Standards Division, remains responsible for issuing exemptions from required hours of work
and for ensuring that provincial labour standards are observed at all times. In the case where onshore work is
undertaken in support of offshore work, the provisions of the Newfoundland and Labrador Occupational Health
and Safety Act would apply.

Pursuant to subsection 152(5) of the C-NAAIA, the Governor in Council may issue further regulations relating to
the applicability of the various Newfoundland and Labrador social legislation. Negotiations are currently underway
to incorporate the right to refuse dangerous work into the Board’s draft regulations.


3)       Marine Occupational Safety and Health Regulations

The Marine Occupational Safety and Health Regulations (MOSH Regulations), which are administered by
Transport Canada through an MOU with Human Resources Development Canada, apply in respect of:
         (a) employees employed on ships registered in Canada;
         (b) employees employed on uncommissioned ships of Her Majesty in right of Canada; and
         (c) employees employed in the loading or unloading of ships.

The regulations apply to all vessels that are not moored to the ocean floor. Drilling platforms or “self powered semi
submersibles” become vessels once they haul anchor, and are therefore subject to the Canada Shipping Act and the
MOSH Regulations. While these regulations are in effect, the drilling platforms continue to be subject to the
Board’s Petroleum Occupational Safety and Health Regulations, Newfoundland (Draft November 1989).
Typically, seismic crews and vessels as well as construction crews are covered under the MOSH Regulations, while
technical crews are covered under the Board’s regulations.




E-2                                              Newfoundland and Labrador Offshore Guide – January 2004
                                                                                         Appendix F – Compendium of Charts



APPENDIX F – COMPENDIUM OF CHARTS

Chart 1   -   CNOPB’s General Work Authorization Process.................................................................F-2
Chart 2   -   Geophysical, Geological, Geotechnical or Environmental Program Authorization....................F-3
Chart 3   -   Drilling Program Authorization .........................................................................................F-4
Chart 4   -   Approval to Drill a Well ...................................................................................................F-5
Chart 5   -   Diving Program Authorization...........................................................................................F-6
Chart 6   -   Exploration Licence..........................................................................................................F-7
Chart 7   -   Significant Discovery Declaration and Significant Discovery Licence......................................F-8
Chart 8   -   Commercial Discovery Declaration .....................................................................................F-9
Chart 9   -   Production Licence......................................................................................................... F-10
Chart 10 -    Development Application ................................................................................................ F-11
Chart 11 -    Development Program Authorization................................................................................ F-12
Chart 12 -    Production Operations Authorization ............................................................................... F-13
Chart 13 -    Well Operations Program Authorization........................................................................... F-14
Chart 15 -    CEAA Environmental Assessment Process ....................................................................... F-15
Chart 16 -    Fisheries Act and Navigable Waters Protection Act Authorizations ....................................... F-16
Chart 17 -    CEPA, 1999 Disposal at Sea Permit............................................................................... F-17
Chart 18 -    Transboundary Pipeline Approvals .................................................................................. F-18
Chart 19 -    Domestic Vessel Inspection and Certification..................................................................... F-19
Chart 20 -    Foreign Vessel Authorizations ......................................................................................... F-20
Chart 21 -    Foreign Worker Authorizations........................................................................................ F-21




Newfoundland and Labrador Offshore Guide – January 2004                                                                                  F-1
Appendix F – Compendium of Charts




F-2                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                                 F-3
Appendix F – Compendium of Charts




F-4                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                                 F-5
Appendix F – Compendium of Charts




F-6                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                                 F-7
Appendix F – Compendium of Charts




F-8                                 Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                                 F-9
Appendix F – Compendium of Charts




F-10                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-11
Appendix F – Compendium of Charts




F-12                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-13
Appendix F – Compendium of Charts




F-14                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-15
Appendix F – Compendium of Charts




F-16                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-17
Appendix F – Compendium of Charts




F-18                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-19
Appendix F – Compendium of Charts




F-20                                Newfoundland and Labrador Offshore Guide – January 2004
                                                          Appendix F – Compendium of Charts




Newfoundland and Labrador Offshore Guide – January 2004                               F-21
Appendix F – Compendium of Charts




F-22                                Newfoundland and Labrador Offshore Guide – January 2004

				
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