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Volume 48, No. 6
B.C. Reg. 138/2005
The British Columbia Gazette, Part II
March 22, 2005

B.C. Reg. 138/2005, deposited March 18, 2005, pursuant to the PETROLEUM AND NATURAL GAS ACT [Section 73 (2)]. Order in Council 204/2005, approved and ordered March 17, 2005.

On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that the Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation, B.C. Reg. 495/92, is amended as set out in the attached Schedule.

— R. NEUFELD, Minister of Energy and Mines; I. CHONG, Presiding Member of the Executive Council.

Schedule

1 Section 1 (1) of the Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation, B.C. Reg. 495/92, is amended by adding the following definitions:

"BPO lease" means a right to produce petroleum or natural gas if

(a) the right arose as a result of a Crown Petroleum and Natural Gas Tenure Disposition Agreement dated May 19, 2004,

(b) in section 1.1 of that agreement, the provisions comprising the 50% Bonus Payment Option have been retained and the provisions comprising the No Bonus Payment Option have been deleted, and

(c) the right to produce petroleum or natural gas relates to lands that are or form part of the Coal Lands as that term is defined in that agreement;

"NBPO lease" means a right to produce petroleum or natural gas if

(a) the right arose as a result of a Crown Petroleum and Natural Gas Tenure Disposition Agreement dated May 19, 2004,

(b) in section 1.1 of that agrement, the provisions comprising the No Bonus Payment Option have been retained and the provisions comprising the 50% Bonus Payment Option have been deleted, and

(c) the right to produce petroleum or natural gas relates to lands that are or form part of the Coal Lands as that term is defined in that agreement; .

2 Section 6 (1) is amended by striking out everything after "must not be less than" and substituting the following:

(a) 15% for Item 1, 9% for Item 1.1, 12% for Item 1.2, 8% for Item 2, 9% for Item 3 and 5% for Item 4, and must not be more than 27% for Items 1.1 and 1.2, and

(b) for marketable gas produced under the authority of a NBPO lease, the greater of

(i) 6%, and

(ii) the rate calculated under paragraph (a) after the application of section 6 (1.3) of this regulation.

3 Section 7 is amended

(a) in subsection (3) by striking out "For purposes" and substituting "Subject to subsection (3.1), for the purposes",

(b) by adding the following subsection:

(3.1) The amount of royalty and tax payable to the Crown for oil produced under the authority of a BPO lease is the net oil royalty or tax calculated in respect of that oil under subsection (3) multiplied by 75%. ,

(c) in subsection (5) by striking out "subsection (7) (a) minus" and substituting "subsection (7) (a), or, for natural gas produced under the authority of a BPO lease, 75% of the total gross natural gas royalty or tax determined under subsection (7) (a), minus", and

(d) by repealing subsection (5) (a) and substituting the following:

(a) the producer cost of service allowance, or, for natural gas produced under the authority of a BPO lease, 75% of the producer cost of service allowance, .

4 Section 7.1 (2) is repealed and the following substituted:

(2) There is to be added to a producer's coalbed methane producer cost of service bank for a coalbed methane project, on the completion of each completed well event that is part of the coalbed methane project and that has a completion date prior to July 1, 2008, the amount determined by multiplying the producer's interest in that well event by the following:

(a) if the well event is on Crown land and production is under the authority of a BPO lease, $37 500;

(b) if the well event is on Crown land and production is under the authority of a NBPO lease, $30 000;

(c) for any other well event on Crown land, $50 000;

(d) for any well event on freehold mineral land, $30 000.


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