In Newfoundland and Labrador, we have begun a new era of petroleum resource development in which the province is taking its place as an active participant in development projects. Through the negotiation of benefits agreements and the establishment of clear regulatory and royalty regimes, Newfoundland and Labrador has positioned itself to get a fairer return on its resources as we work with our partners on our existing and future developments.
This province’s onshore and offshore oil and gas resources are regulated by two different systems. Resource development onshore is regulated by the Petroleum and Natural Gas Act while offshore petroleum resources are jointly managed by the federal and provincial governments through the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). The C-NLOPB manages the regulatory regime established by the Atlantic Accord in 1985 and the subsequent implementation legislation.
At present, the province has offshore royalty regulations in place, however, these are supplemented by specific royalty agreements with the operators of each current offshore oil development. For all offshore petroleum projects, benefits agreements are negotiated with project operators and provide the province with royalties, as well as employment commitments and targets, and industrial benefits.
In order to continue to attract new investment in the province’s petroleum development sector, the Government of Newfoundland and Labrador recognizes that it is essential to maintain clear and competitive regulatory and royalty regimes. To this end, Government has developed an Offshore Natural Gas Royalty Regime to provide potential operators with important fiscal information required to assess project economics for the province’s immense and, as yet, undeveloped natural gas reserves. Government is also in the process of developing a new Generic Offshore Oil Royalty Regime to provide the same fiscal information to guide future investment in undeveloped offshore oil reserves. The links below provide more information on the royalty regimes in place for each of the province’s existing offshore development projects, as well as information on the new royalty regimes.
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