Oil Sands Tenure Agreement Authorization
|Oil Sands Lease Agreement
|| Based on the
Oil Sands Tenure Regulation Alberta Energy (the department)
issues an oil sands lease agreement to the highest bidder to
drill for, win, work, recover and remove oil sands for a 15 year
term. Upon expiry, the lessee may continue the oil sands lease
if they meet the minimum level of evaluation required for each
section within the lease.
|Oil Sands Permit Agreement
|| Based on the
Oil Sands Tenure Regulation the department issues an oil
sands permit agreement to the highest bidder to drill for, win,
work, recover and remove oil sands for a 5 year term. Upon
expiry, the lessee may apply for a lease selection if they meet
the minimum level of evaluation required for each section. .
|Purpose of Authorization
- Authorizes disposition oil sands leases and permits,
which grant the right to drill for and recover the oil
- The intent is orderly development of the province’s oil
sands, essential to the viability of the non-renewable
resource industries and the provincial economy.
|Description of Authorization Process
||High-level Overview of Authorization Process:
Application Process / Authorization Requirements Details:
- Sales of oil sands rights are initiated by posting
requests submitted by industry.
- The department posts available rights in a public
offering notice eight weeks in advance of the sale and then
issues an agreement (lease or permit) to the highest bidder
of each parcel.
- If there is activity (i.e., drill, recover, or remove
authorized substances), industry can apply for continuation
or lease selection. If rejected the lands are returned to
the land bank.
- At expiry, if no application is processed or if no
application was received and there was no action on the
land, the department cancels the agreement. The rights are
returned to the land bank and the cycle starts again.
- Leases and permits have similar obligations with 2
- Leases have a 15 year term; Permits however, are
considered exploratory and have a 5 year term.
- Historical activities may be considered for
evaluation of leases; though, only activities within the
5 year term are considered for evaluation of permits.
- Leases and permits must attain the minimum level of
evaluation at expiry in order to be granted continuation or
- Refer to specific information on Alberta Energy's website under:
Oil Sands Sales:
- Click here
to access forms page. Documentation includes: Electronic
Transfer System (ETS) Set Up/Change Form, Direct Purchase
information, Electronic Funds Transfer (EFT) Authorization
Forms, and Tenure Administration forms.
As the result of exploration and development,
industry submits requests to the department for parcels of land
to be included in the public offering process. Public offerings
(or sales) of oil sands rights are held every two weeks. After
each sale, Crown oil sands rights are issued in the form of
permits or leases to the highest bidder on each parcel. If very
specific requirements are met, clients may also apply for a
direct purchase, also known as a private sale, of oil sands
When industry reviews posted lands, an addendum may be used to
identify surface access restrictions on Crown land. The addenda
are: no surface access; restricted surface access or no
restrictions. Industry can decide whether they want to bid on
the parcel based on the restriction, or adjust their bid
accordingly. Surface access restrictions reflect broad
government policy/planning level decisions, no on-the-ground
operational conditions. Based on the nature of the access
restrictions, industry can decide whether they want to bid on
the parcel, or adjust their bid value accordingly.
Restrictions are only listed for Crown owned surface.
Oil Sands Leases and Permits:
There are two types of agreements for oil sands:
Oil Sands Lease:
Based on the
Oil Sands Tenure Regulation,
the department issues an oil sands agreement to the highest
bidder to drill for, recover and remove oil sands within the
location of the agreement. Upon expiry, the lessee may apply for
continuation of all or part of the lease subject to the minimum
level of evaluation (MLE) attained.
Oil Sands Permit:
- Continued leases have an indefinite term.
- If the lease is producing at the minimum requirements
then continuation with a producing status is granted.
- If continuation with a non producing status is granted,
the lease is subject to escalating rent.
- Based on the Oil Sands Tenure Regulation, the department
issues an oil sands permit to the highest bidder to drill
for, recover and remove oil sands for a term of five years.
Upon expiry, the lessee may apply for lease selection on all
or part of the oil sands permit.
- If the lease selection is granted, then one or more 15
year term oil sands lease(s) are issued.
|Linkages to other processes
- Desire to acquire Crown mineral rights to explore and
- Industry submits posting requests because they may have
- Public engagement occurs through other processes (e.g.,
- Stakeholder engagement applies to surface activities
relating to development of oil sands. Because of the nature
of the public offering process, the developer or lessee is
not known until the agreement is issued
||Contacts are specific to the business area.
Oil Sands Tenure Contact
Figure: Life Cycle of Oil Sands Rights
Alberta Energy publishes an Information Letter. These Information Letters can be found here
The Posting Cycle
The posting cycle for public offering normally takes 17 weeks.
Figure: The Tenure Sale Process