Production Licence (ISR)
Purpose of the Production Licence
The purpose of the Production Licence (PL) is to grant, with respect to the lands 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 lands in order to produce petroleum
- The exclusive right to produce petroleum from those lands
- Title to the petroleum so produced.
The PL has a term of 25 years. Upon expiry, it can be extended for such a period thereafter during which commercial production of petroleum continues.
Overview of the Production Licence
The authority to issue PLs is provided by the (NWT) Petroleum Resources Act. To be granted a PL, the Proponent must hold a current Exploration Licence (EL) or Significant Discovery Licence (SDL) in respect of any Commercial Discovery Area or portion thereof. The Proponent must also hold a Commercial Discovery Declaration (CDD) from the National Energy Board (NEB) that is in force for the same area. The Proponent, which must be incorporated in Canada, then submits an application for a PL. The PL is then prepared according to both the application and the declaration and issued on behalf of the Minister of ITI and then registered in the NWT Petroleum Lands Registry by the Registrar. Once registered the PL is sent to the Proponent.
Process Milestones
The Production Licence process consists of three milestones. A “milestone” is a major step in a process that involves a key action taken or decision made. Each milestone, in practice, consists of one or more “steps” which describe the mechanics of how the authorization is processed. For more information on the process steps and activities that are conducted within each step, contact the Petroleum Resources Division.
Milestone 1 - Application submitted
Milestone 1 consists of the following step:
- Step 1 – Proponent submits Letter of Application to (ITI-PDD)
Milestone 2 - ITI review
Milestone 2 consists of the following four steps:
- Step 2 – ITI-PDD determines whether application is complete
- Step 3 – ITI-PDD determines whether the land in the application is within the commercial discovery declaration
- Step 4 – ITI-PDD determines whether the Proponent is incorporated in Canada
- Step 5 – ITI-PDD determines whether the Proponent’s ownership information is correct
Milestone 3 -Licence approved and registered
Milestone 3 consists of the following four steps:
- Step 6 – ITI-PDD produces the Draft Production Licence document
- Step 7 – ITI Minister signs the Production Licence
- Step 8 – ITI-PDD registers Production Licence
- Step 9 – ITI-PDD issues Production Licence
For further information, please contact us.