Manitoba Petroleum Fiscal Regime March 2007

Provincial Crown Oil and Gas Royalties

Provincial Freehold Oil and Gas Production Taxes

Drilling Incentive Program

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Introduction

This publication provides a summary of Manitoba’s petroleum fiscal regime including Provincial Crown Oil Royalties and Freehold Oil Tax.  It also outlines the Manitoba Drilling Incentive Program designed to encourage investment in the sustainable development of the Province’s petroleum resources. 

The Province’s petroleum fiscal regime is established under The Oil and Gas Act and The Oil and Gas Production Tax Act and related regulations. 

Access to these statutes published by Manitoba’s Statutory Publications is available from the Petroleum Branch at the following address. 

ManItoba  SCIENCE, TECHNOLOGY, ENERGY  AND MINES
Petroleum Branch
360 - 1395 Ellice Avenue
Winnipeg, Manitoba   R3G 3P2

Ph:       (204) 945-6577
Fax:     (204) 945-0586
Web site: www.gov.mb.ca/petroleum

Oil Classification

Oil produced in Manitoba is classified in one of four categories, old oil, new oil, third tier oil and holiday oil.

• oil produced from a well drilled prior to April 1, 1974 that does not quality as new oil or third tier oil.
  

• oil that is not third tier oil and is produced from a well drilled on or after April 1, 1974 and prior to
  April 1, 1999;
• oil produced from an abandoned well re-entered on or after April 1, 1974 and prior to April 1, 1999;
• oil produced from an oil well that, in the opinion of the Director, can be reasonably attributed to an increase in reserves from an enhanced recovery project implemented after April 1, 1974 and prior to April 1, 1999
• oil produced from a horizontal well.
  
  

• oil produced from a vertical well drilled or re-entered on or after April 1, 1999;
• oil produced from an abandoned well that is re-entered on or after April 1, 1999;
• oil produced from an inactive vertical well, activated after April 1, 1999;
• oil produced from a marginal well that has undergone a major workover; or
• oil produced from an old well or new oil well that, in the opinion of the Director, can be reasonably attributed to an increase in reserves from an enhanced recovery project implemented under The Oil and Gas Act after April 1, 1999.
  
   

• oil production that is exempt from any royalty payable under the Crown Royalty and Incentives Regulation, or any tax payable under the Oil and Gas Production Tax Regulation.