Are Royalty Agreements Required For Canada East Coast Offshore Oil And Gas?

This article examines the royalty regime in the area offshore the two oil and gas producing provinces on the east coast of Canada. A review of the historical background of the legislative framework is provided. The right to levy royalties on the production of oil and gas is reviewed. The legislative provisions relating to the execution of royalty agreements and the introduction of generic royalty regulations are examined. The article describes specific fiscal and commercial terms which are not included in the current Nova Scotia generic royalty regime and might not be included in the generic regime which might be proposed by Newfoundland. The article concludes that, in all instances, a royalty agreement in some form will be required.