FRANCAIS

March 16, 2005

Amendments to oil and gas legislation would strengthen environmental protection, streamline administration, enhance enforcement and encourage exploration, Industry, Economic Development and Mines Minister Jim Rondeau said today.

"The proposed changes will ensure the province’s oil and gas legislation continues to support the sustainable development of our oil and gas resources," said Rondeau, adding the proposed amendments stem from a two-year consultation process involving industry, stakeholders, interest groups, local governments and affected First Nations. "In addition, they will provide for better environmental protection of our land and water."

Proposed changes detailed in the Oil and Gas Amendment and the Oil and Gas Tax Amendment acts would strengthen provisions for environmental protection related to exploration, development and production of the province’s oil and gas resources, as well as administration of the collection of tax on oil production.

To strengthen enforcement and protection of the environment, some applicants for well licences would submit an environmental protection plan to mitigate impact on the environment. The plan would be subject to an interdepartmental review.

In addition, the province is proposing amendments to increase contributions to the abandonment fund, used to take remedial action against delinquent oil and gas operations. The proposal would direct interest earned on deposits paid by operators and up to three per cent of Crown oil and gas royalties to the abandonment fund. These amendments would strengthen the province’s ability to respond to delinquent operators.

Proposed amendments to seizure provisions would allow the department to put wells that have been seized into production, transfer the well to another operator and cancel a Crown oil and gas lease.

"This would help offset costs associated with the abandonment and rehabilitation of seized operations and facilitate the transfer to another operator," said Rondeau. "The strengthened provisions go hand in hand with the increased support to the abandonment fund and will allow us to take escalating enforcement action against delinquent operations in a timely manner to protect the public and the environment."

In response to growing interest in Manitoba’s natural gas potential, the proposed amendments would also allow for Crown oil and gas rights to be disposed of under special exploration permits. This would let operators conduct exploration on large tracts of Crown oil and gas in lightly explored areas of the province. It would complement the existing system of exploration reservations and leases available to operators and bring Manitoba in line with competing jurisdictions such as Saskatchewan.

"Even though oil was discovered in Manitoba over 50 years ago, much of the province remains only lightly explored," said Rondeau. "Special exploration permits would encourage companies to expand their search for oil and gas in Manitoba."

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