Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act — C-7.5 163
Financial responsibility 163 (1) An applicant for an authorization under paragraph 138(1)(b) shall provide proof of financial responsibility in the form of a letter of credit, guarantee or indemnity bond or in any other form satisfactory to the Regulator, (a) in the case of the drilling for or development or production of petroleum in the offshore area, in the amount of $100 million or, if the Regulator considers it necessary, in a greater amount that it determines; or (b) in any other case, in an amount that is satisfactory to, and determined by, the Regulator. Pooled fund (1.01) An applicant to which paragraph (1)(a) applies may, rather than provide proof of financial responsibility in the amount referred to in that paragraph, provide proof that it participates in a pooled fund that is established by the oil and gas industry, that is maintained at a minimum of $250 million and that meets any other requirements that are established by regulation. Increase in amount by regulation (1.02) Subject to section 7, the Governor in Council may, by regulation, increase the amount referred to in subsection (1.01). Continuing obligation (1.1) The holder of an authorization under paragraph 138(1)(b) shall ensure that the proof of financial responsibility referred to in subsection (1) or (1.01) remains in force for the duration of the work or activity in respect of which the authorization is issued. Extended obligation (1.2) The holder of an authorization under paragraph 138(1)(b) shall also ensure that the proof referred to in paragraph (1)(a) or subsection (1.01) remains in force for a period of one year beginning on the day on which the Regulator notifies the holder that it has accepted a report submitted by the holder indicating that the last well in respect of which the authorization is issued is abandoned. The Regulator may reduce that period and may decide — other than in the case of a holder that participates in a pooled fund — that the proof that is to remain in force during that period is for an amount that is less than the amount referred to in paragraph (1)(a) and that is determined by the Regulator. Payment of claims (2) The Regulator may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Regulator in the absence of regulations, be paid out of the funds available under the letter of credit, guarantee or indemnity bond or other form of financial responsibility provided under subsection (1), or be paid out of the pooled fund referred to in subsection (1.01), in respect of any claim for which proceedings may be instituted under section 162, whether or not those proceedings have been instituted. Manner of payment (3) Where payment is required under subsection (2), it shall be made in such manner, subject to such conditions and procedures and to or for the benefit of such persons or classes of persons as may be prescribed by the regulations for any case or class of cases, or as may be required by the Regulator in the absence of regulations. Deduction (4) Where a claim is sued for under section 162, there shall be deducted from any award made pursuant to the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed. Reimbursement of pooled fund (5) The holder of an authorization under paragraph 138(1)(b) that is liable for a discharge, emission or escape of petroleum that is authorized by regulation or for any spill or debris in respect of which a payment has been made under subsection (2) out of the pooled fund, shall reimburse the amount of the payment in the prescribed manner. 1987, c. 3, s. 163; 1992, c. 35, s. 76; 2015, c. 4, s. 62 2024, c. 20, s. 101