Growth, Enterprise and Trade
THE OIL AND GAS ACT
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Regulations |
PART 7
Production Operations
Drilling and Production Regulation Table of Contents
Definition
61 In this Part, "pre-Mississippian pool" means a pool of Devonian, Silurian, Ordovician, or Cambrian age.
62(1) Subject to subsection (3), the maximum production rate of clean oil for a well that is off-target is as follows:
(a) 750 m3 per month for a well producing from a pre-Mississippian pool or a horizontal well; and
(b) 300 m3 per month for any other well.
62(2) Maximum production rates are effective in the month of the on-production date determined under section 66.
62(3) A maximum production rate does not apply to a well that is drilled within the target area in a spacing unit or to a horizontal well that is deemed under subsection 13(2) to be on target.
62(4) Production of oil in excess of the maximum production rate determined under this section is accumulated and deducted from the succeeding month’s maximum production rate.
62(5) Unless the director in writing authorizes continued production, where the amount of the accumulated overproduction for a well exceeds the amount determined as the maximum production rate for the well under subsection 62(1), the licensee shall shut in the well until the amount of overproduction is reduced to zero.
Multiple wells in spacing unit
Drilling and Production Regulation Table of Contents
63(1) Subject to subsection (3), an application under section 107 of the Act for approval to produce oil and gas from a well in a spacing unit in which a well is producing or capable of producing oil and gas must be made to the director and must include a discussion of the effect of the proposed well on:
(a) recovery from the spacing unit; and
(b) correlative rights.
63(2) Subsection (1) does not apply to a horizontal well.
Application to vary or remove MPR
64 Section 64 is repealed
65 The minister may delegate his or her authority to make an order under section 105 of the Act to the director.
On-production date
Drilling and Production Regulation Table of Contents
66 The on-production date of a well is the date on which the well produces oil in excess of the volume of any oil used to complete the well.
67(1) The licensee shall conduct an initial production test and shall within 14 days after conducting the test report the results to the district office on the form provided by the branch.
67(2) The licensee shall ensure that the initial production test commences on the first day of normal production after the on-production date and continues for the next four producing days.
67.1 A licensee shall, within 14 days of commencing injection operations at a well, report the date on which injection was commenced to the district office on a form provided by the branch.
68 Sections 66, 67 and 67.1 apply to a well recompleted in another pool.
69(1) Subject to subsection (3), the licensee shall ensure that every well producing to a battery is tested every three months for not less than 24 hours at normal operating conditions to determine the rate of oil, gas, and water production.
69(2) The licensee shall use the results of the tests under subsection (1) to pro-rate the monthly production from the battery to the wells that are producing to the battery.
69(3) The licensee may apply to the director to reduce the frequency of well testing required under subsection (1), and the application must include:
(a) the proposed frequency and method of testing;
(b) a discussion of the accuracy of present well testing;
(c) justification for reducing the test frequency, including:
(i) the effect on recovery and correlative rights; and
(ii) if the proposal is based on economic considerations, specific economic data; and
(d) any other information the director may require.
Application for salt water disposal permit
Drilling and Production Regulation Table of Contents
70 An application under section 109 of the Act for a salt water disposal permit must be made to the director on a form provided by the branch and must include:
(a) a written consent to the application by the royalty owner of the spacing unit of the well;
(b) a copy of a notice of the licensee’s plans provided to the surface owner;
(c) the names and addresses of owners within 0.5 km of the proposed disposal well;
(d) a diagram that includes a detailed description of the proposed injection, treatment, and measurement facilities and the configuration and rated working pressure of piping and equipment;
(e) a diagram of the wellbore that shows the existing and proposed completion details;
(f) the proposed method of controlling corrosion in the wellbore, flow line, and surface facilities;
(g) a geological and engineering report that includes:
(i) a cross section of the disposal formation in the vicinity of the proposed disposal well, including the top and base of the formation and fluid interfaces;
(ii) a map that shows the structure of the top of the disposal formation within 1 km of the proposed disposal well;
(iii) a list of rock and fluid properties, including the estimated fracture pressure of the formation;
(iv) a graph showing the production history of the proposed disposal well and offsetting wells;
(v) the source of the salt water, the estimated total daily volume to be injected, and the anticipated maximum wellhead injection pressure; and
(vi) a discussion of the anticipated effect of disposal on the ultimate recovery from the pool;
(h) a discussion of the anticipated effect of disposal on the correlative rights of the owners referred to in clause (c); and
(i) any other information that the director or minister may require.
Application for approval of enhanced oil recovery
Drilling and Production Regulation Table of Contents
71 An application under section 116 of the Act for approval of a project of enhanced recovery must be made to the director and must include:
(a) a map showing the area in which the proposed project would be undertaken and the pool limits;
(b) the names and addresses of owners in the project area and within 0.5 km of the project area;
(c) a diagram showing the wellbore and the method of completion of any injection well;
(d) if the project involves the injection of fresh water, proof of compliance with any licensing requirements under The Water Rights Act;
(e) a copy of a notice, and proof of service of the notice, to the surface owners in the project area advising of the proposed project of enhanced recovery;
(f) a diagram that includes a detailed description of the water injection, treatment, and measurement facilities and shows the configuration and rated working pressure of piping and equipment;
(g) details of the proposed method of controlling corrosion in the wellbores, flow lines, and surface facilities;
(h) a geological and engineering report that includes:
(i) a cross section of the pool showing the top and base of the reservoir and fluid interfaces;
(ii) a map of the structure of the top of the reservoir;
(iii) maps showing the pore volume and permeability capacity of the reservoir;
(iv) a list of rock and fluid properties, including the estimated fracture pressure of the formation;
(v) the original oil in place in the project area;
(vi) forecasts of production and ultimate recovery under existing and proposed depletion mechanisms;
(vii) the source of the injection fluid and evidence of its compatibility with the reservoir rock and fluids;
(viii) a list of the wells to be converted to injection and the estimated injection rates and wellhead injection pressures for each well;
(ix) predictions respecting recovery, including the displacement and volumetric sweep efficiencies, economic limits, and the result of any simulation model;
(x) any methods considered to maximize recovery, including preventing injection out of the pool and channeling; and
(xi) the measured or estimated reservoir pressure in the project area, and the reservoir pressure at which the project will be conducted;
(i) the proposed schedule for drilling and conversion of the wells, and for the construction of facilities; and
(j) any other information that the director or minister may require.
Delegation
Drilling and Production Regulation Table of Contents
72 The minister may delegate his or her authority to make an order under section 116 of the Act to the director.
73(1) The operator of a project of enhanced recovery approved under section 116 of the Act shall file a report with the director within 60 days after the end of each calendar year that includes the following information for that year:
(a) the oil production rate, injection rate, GOR, and WOR during each month for each injection pattern and for the whole project;
(b) the cumulative volume of oil, gas, and water produced and fluid injected for each injection pattern and for the whole project at the end of the year;
(c) the monthly wellhead injection pressure for each injection well;
(d) a summary of the result of any survey of reservoir pressure conducted during the year;
(e) the date and type of any well servicing;
(f) calculations of the voidage replacement ratio on a monthly and cumulative basis for each injection pattern and for the project area;
(g) an outline of the method used for quality control and treatment of the injected fluid;
(h) a report of any unusual performance problems and remedial measures taken or being considered;
(i) any other information that the operator or director considers necessary to evaluate the performance of the project.
73(2) The data referred to in clauses (1)(a) to (c) must be submitted in tabular and graphical form.
Operator to give notice to district office
Drilling and Production Regulation Table of Contents
74 The operator of a battery shall give notice to the district office as follows:
(a) not less than 24 hours before commencing the construction of a battery;
(b) after completing the construction of a battery, but before the battery goes into operation;
(c) as soon as practicable after completing a minor modification to a battery under subsection 76(2);
(d) not less than seven days before suspending a battery under section 78.
(e) not more than 24 hours after receiving a complaint from a member of the public who has detected odours or emissions from a battery. This notice shall include the actions taken or proposed to be taken by the operator to remedy any problem and prevent future occurrences.
Application for battery operating permit
75(1) An application under section 111 of the Act for a battery operating permit must be submitted to an inspector at least 30 days before the date on which it is planned to commence construction and must include:
(a) the application fee and levy set out in Schedule A;
(b) the performance deposit required under section 10;
(c) two copies of a survey plan of the battery location in a form acceptable to an inspector;
(c.1) the names and addresses of all landowners and occupants within 1.5 km of the proposed site of the battery and a description of the applicant's consultations with those landowners and occupants, including a summary of any concerns raised during the consultation process and all actions taken or proposed to be taken by the applicant to address the concerns of the landowners and occupants;
(d) a list of the wells to be tied in to the battery;
(e) an estimate of the production rates of oil, water and gas for the battery, including the estimated volume of gas.
(i) used for fuel,
(ii) flared, or
(iii) vented;(e.1) copy of a representative gas analysis for the battery in a form acceptable to an inspector;
(f) the specifications of any process vessel to be used, including the name of the manufacturer, dimensions, Canadian Registration Number (CRN), minimum and maximum flow capacity and design and estimated operating pressure and temperature;(g) details of well testing facilities associated with the battery, including the method, frequency, and duration of well testing;
(g.1) details of the flare and vapour recovery systems for the battery;
(g.2) where the applicant proposes to vent gas containing hydrogen sulphide,(i) reasons why the gas cannot be flared,
(ii) specific actions to be taken to minimize the volume of gas vented, and
(iii) the method of controlling off-lease odours;(g.3) where gas production will contain hydrogen sulphide, a copy of air dispersion modelling results in a form acceptable to the director demonstrating that the battery will comply with the requirements of subsection 85.2(1);
(h) two copies of a plot drawing on a scale of not less than 1:125 and showing the location of:
(i) each process vessel, tank, and salt water disposal facility;
(ii) any pit, dyke, flare line, or pop tank and its size; and
(iii) any other equipment;
(i) two copies of a schematic process flow diagram showing:
(i) process vessels, meters, tanks, and salt water disposal equipment;
(ii) valves, pumps, and piping;
(iii) pressure relief valves and settings, emergency shut down systems, and any other equipment intended to prevent a spill or to mitigate the amount of a spill;
(j) repealed
(k) if there are no facilities for the disposal of water, plans for the disposal of produced water; and
(l) any other information that an inspector or the director may require.
75(2) The operator of a single well producing directly to a tank on the wellsite is exempt from section 111 of the Act.
75(3) The permittee shall ensure that a copy of the battery operating permit is posted in a conspicuous place at the battery site at all times.
75(4) No person shall locate equipment at a battery at a distance that is less than is set out in Schedule C unless an inspector, on application by the person:
(a) is satisfied that special circumstances exist that justify locating the equipment at a lesser distance; and
(b) provides the permittee with written approval to locate the equipment at a specified lesser distance.
Application for battery modification
Drilling and Production Regulation Table of Contents
76(1) An application under subsection 111(5) of the Act for approval to modify a battery by installing, replacing, or removing any process vessel, tank, meter, or equipment designed for environmental protection must be made to an inspector and must include:
(a) a description of the proposed modification and its effect on the operation of the battery;
(b) where the modification requires changes to the battery plot, a revised plot drawing;
(c) a revised schematic process flow diagram;
(c.1) any information required under subsection 75(1) that is relevant to the proposed modification; and(d) any other information an inspector may require.
76(2) Notwithstanding subsection (1), the permittee may, after giving notice to the district office, proceed with a minor modification to a battery that does not significantly affect a process, measurement, or environmental protection at the battery and, where the modification requires a change to the battery plot or schematic process flow diagram, shall within 30 days after completing the modification submit a revised plot drawing or schematic process flow diagram to the district office.
Flaring or venting at existing batteries
76.1(1) A permittee who holds a battery operating permit that was issued before June 30, 2000 shall apply, by April 30, 2002, for approval to continue flaring or venting at the battery.
76.1(2) If a permittee who holds a battery operating permit that was issued before June 30, 2000 does not apply by April 30, 2002 to continue flaring or venting at the battery, the battery operating permit is cancelled effective April 30, 2002.
76.1(3) An application under subsection (1) must be made to the director and include
(a) comments on current battery operations from all landowners and occupants within 500 m of the battery and other nearby landowners or occupants who have previously expressed concerns to the permittee or the branch with respect to operation of the battery;
(b) an estimate of the production rates of oil, water and gas for the battery, including the estimated volume of gas(i) used for fuel,
(ii) flared, or
(iii) vented;(c) a copy of a representative gas analysis for the battery in a form acceptable to an inspector;
(d) details of the flare or venting system including, where gas production at the battery contains hydrogen sulphide, a copy of air dispersion modelling results for the battery in a form acceptable to the director;
(e) a description of any proposed modification to the battery required to ensure compliance with subsection 85.2(1) and its effect on battery emission, including(i) specific actions to be taken to reduce or eliminate venting, control off-lease odours and improve flare system operations, and
(ii) a copy of revised air dispersion modelling results that incorporate the proposed battery modifications; and(f) any other information the director may require.
76.1(4) Any modifications to a battery proposed by an operator under clause 76.1(3)(e) or required by the director as a condition of approval to continue flaring and venting shall be completed by October 31, 2002.
76.1(5) If a permittee has not completed the modifications to a battery set out in subsection (4) by October 31, 2002, the battery operating permit of the permittee is cancelled effective October 31, 2002.
76.1(6) Where an operator has completed modifications to a battery set out in subsection (4) or has demonstrated under clause 76.1(3)(d) that the battery complies with the requirements of subsection 85.2(1), the director shall issue a new battery operating permit authorizing continued operation of the battery.
Operator to maintain site of well and battery
Drilling and Production Regulation Table of Contents
77 The operator shall maintain the wellsite or battery site in good condition, free of debris, and shall maintain a fire-free area of 5 m around the well and all equipment.
78 Unless otherwise approved by an inspector, if a battery has not been used for six months, the operator shall suspend the battery by:
(a) draining all process vessels and tanks;
(b) isolating and locking out the battery from all pressure sources;
(c) securing the site against tampering; and
(d) taking any other measure to protect against spills as may be required by an inspector.
78.1 Upon completion of the suspension of a battery, the operator shall submit a summary of suspension operations to the district office on a form provided by the branch.
Application to abandon battery
79 An application under subsection 122(1) of the Act to abandon a battery must be made to an inspector on a form provided by the branch and must include plans for clean-up, contouring, and rehabilitation of the site in accordance with section 59 of this regulation.
Tanks
Drilling and Production Regulation Table of Contents
80(1) The permittee shall ensure that tanks with a storage capacity sufficient to contain a volume of 24 hours of salt water production are installed at the battery unless the battery has:
(a) an alarm or emergency shut down system; or
(b) an emergency storage pit.
80(2) The permittee shall ensure that each tank or group of tanks at a well or battery is surrounded by a dyke with a minimum net capacity of 110% of the volume of the largest tank within the dyke or such greater capacity as an inspector may require.
80(3) The operator shall keep the dyke in good condition and maintain a 5 m fire-free area around the dyke.
80(4) Unless otherwise required by an inspector, subsection (2) does not apply where a tank is temporarily installed at a well for the purpose of testing the well.
81(1) Where a pressure relief device is installed on a process vessel, the permittee shall connect the pressure relief device by piping to a suitable tank.
81(2) Notwithstanding subsection (1), an inspector may, on application, approve the use of an alternate system or method of preventing spills where the inspector is satisfied that the degree of environmental protection provided by the system or method exceeds that provided under subsection (1).
81(3) Unless otherwise authorized by an inspector, the tank referred to in subsection (1) must be adequate to contain the maximum possible flow from the facility to which it is connected but, in the case of a well testing satellite, must be of a volume equal to the daily production of oil and water of the most productive well.
Construction or use of emergency storage pits
Drilling and Production Regulation Table of Contents
82(1) The permittee shall not construct or use a pit for the emergency storage of oil or salt water unless the construction and use of a pit is authorized under a battery operating permit.
82(2) An emergency storage pit must be:
(a) equipped with an impervious liner;
(b) equipped with suitable fencing;
(c) located and constructed so that it will not collect natural run-off water;
(d) equipped with any device required to monitor the integrity of the liner; and
(e) roped and flagged at 3 m intervals to prevent waterfowl from entering the pit.
82(3) The permittee shall immediately advise the district office of any use of the emergency storage pit, including the nature of the emergency and the steps taken to return to normal operation.
82(4) Where an emergency pit is used, the permittee shall remove and properly dispose of the fluid from the pit within three days.
83 Every process vessel must be manufactured, tested, maintained, and operated in accordance with the Standard B51-M-1991 Boiler, Pressure Vessel and Pressure Piping Code, as amended from time to time, of the Canadian Standards Association.
Flare design and operation
Drilling and Production Regulation Table of Contents
84(1) All flare systems installed at a battery shall
(a) provide stable and efficient combustion of any gas directed to it;
(b) achieve sufficient atmospheric dispersion of emissions that comply with subsection 85.2(1);
(c) remove any liquid hydrocarbons or other liquids from the gas prior to flaring; and
(d) limit the visible emission of smoke.
84(2) Unless otherwise approved by an inspector, a flare system installed at a battery shall be equipped with a wind guard and an auto-ignition system capable of igniting or re-igniting the flare in all weather conditions.
85(1) No person shall locate a flare pit, end of flare line, or flame-type equipment at a distance from a surface improvement or feature that is less than is set out in Schedule C unless an inspector, on application by the person:
(a) is satisfied that special circumstances exist that justify locating the equipment at a lesser distance; and
(b) provides the person with written approval to locate the equipment at a specified lesser distance.
85(2) The permittee shall construct and safeguard all flare pits and flare lines so that no fire hazard exists.
85(3) The permittee shall ensure that no flame-type equipment is located in the same building as a process vessel or other source of ignitable vapour, unless:
(a) the air intakes and flues of all burners are located outside of the building;
(b) relief valves, safety heads, and other sources of ignitable vapour are vented outside the building and discharged above the level of the roof of the building; and
(c) the building is cross ventilated.
85(4) The permittee shall ensure that any process vessel or equipment from which ignitable vapour could issue is designed and operated in a manner that allows for the safe release of such vapours.
85(5) The permittee shall ensure that a vapour recovery system and all lines from tanks that are directed to a flare system have flame arrestors or other safety devices that are acceptable to an inspector.
Hydrogen sulphide gas safety requirements
Drilling and Production Regulation Table of Contents
85.1 The operator of a battery where gas containing hydrogen sulphide might reasonably be encountered shall ensure that
(a) any worker at the battery
(i) is certified in the Petroleum Industry Training Service (PITS) "H2S Alive" course or an equivalent certification acceptable to an inspector, and
(ii) is equipped with a personal monitor to alert the worker to the presence of hydrogen sulphide gas;(b) a sign warning of the presence or potential presence of hydrogen sulphide gas is posted at a conspicuous place at the entrance to the battery; and
(c) unless otherwise approved by an inspector, the battery is equipped with a monitor to alert workers of the presence of hydrogen sulphide gas in a building or other area on the battery site.
85.2(1) For the purpose of subsection 114(1) of the Act (operator to limit discharge of pollutants), gas containing hydrogen sulphide that is vented or burned at a well or battery shall be vented or burned in a manner that ensures the concentration of hydrogen sulphide and sulphur dioxide beyond the well or battery site does not exceed the levels set out in Schedule G.
85.2(2) The operator shall determine the concentration of hydrogen sulphide and sulphur dioxide resulting from emissions from a well or battery using an air dispersion model and methodology acceptable to the director.
85.2(3) In calculating the concentrations of hydrogen sulphide and sulphur dioxide, all measurements shall be corrected to a reference temperature of 25o C and a reference pressure of 101.3 kiloPascals.
Off-lease odours
Drilling and Production Regulation Table of Contents
85.3 Where the director considers that venting gas to the atmosphere at a well or battery results or may result in off-lease odours, the director may, in accordance with subsection 114(2) of the Act (operator to limit discharge of pollutants), require the operator to treat or flare the gas or take such other steps as are required to eliminate or reduce the off-lease odours.
Electrical installations at well or battery
86 All electrical installations at a well or battery must conform to the Manitoba Electrical Code.
87 The licensee of a well or the operator of an oil and gas facility shall ensure that any moving part of machinery located at a well or oil and gas facility is guarded during its operation in order to prevent injury.
Fencing requirements
Drilling and Production Regulation Table of Contents
88(1) Unless otherwise authorized by the director, the licensee of a well located within 200 m, or the permittee of a battery located within 500 m, of a recreation area or dwelling shall enclose the wellsite or battery site with a fence that is:
(a) at least 2 m high;
(b) constructed of a small industrial mesh or other material approved by an inspector; and
(c) equipped with a locking gate.
88(2) Notwithstanding subsection (1), where the director considers that the location of any well or battery is or could be a safety hazard, the director may require the wellsite or battery site to be fenced in accordance with clauses (1)(a) to (c).
89(1) The operator of a well or a battery shall ensure that oilfield waste:
(a) is stored, processed, and disposed of in a manner that minimizes any adverse impact on the environment; and
(b) does not create or constitute a hazard to safety or health.
89(2) Where a battery is to include facilities for the storage, processing, or disposal of oilfield waste, an application for a battery operating permit or for approval of modifications to a battery must include:
(a) the source, type, and volume of oilfield waste to be stored, processed, or disposed of at the battery;
(b) the proposed procedure for storing, processing, or disposing of oilfield waste at the battery;
(c) an assessment of the battery site, including:
(i) a representative soil profile and analysis; and
(ii) a survey and analysis of ground water;
(d) the measures proposed to prevent the contamination of air, water, and soil;
(e) plans for monitoring the integrity of the site, including the location and design of any piezometers; and
(f) any other information an inspector or the director may require.
89(3) The permittee of a battery at which oilfield waste is stored, processed, or disposed of shall keep a record of:
(a) the name of each person who supplies oilfield waste and the source of the oilfield waste;
(b) the type and volume of oilfield waste;
(c) the disposition of all fluids recovered from the oilfield waste; and
(d) any other information an inspector may require.
89(4) The permittee shall file a copy of the records kept under subsection (3) with the district office not later than February 28 of each year for the previous calendar year or upon the request of an inspector.
89(5) Before disposing of any solid oilfield waste, the permittee shall obtain approval from an inspector for the proposed method of disposal.
89.1 A royalty required under section 182(3) of the Act shall be equal to 15% of the fair market value of the oil and gas produced as determined by the director in accordance with section 7 of the Crown Royalty and Incentives Regulation.
