The Licensee Liability Rating Program manages the financial risk to the Saskatchewan Oil and Gas Orphan Fund (SOGOF), in terms of a licensee’s future costs to abandon and reclaim their wells and facilities, through the collection of security deposits.
The collected security deposit may be refunded to a licensee when eligible or forfeited to the SOGOF to carry out the abandonment and/or reclamation work required when a licensee is defunct.
NOTE: The security deposit requirement is only applicable to oil and gas producers. Therefore, any company holding only well/facility licences for purposes other than oil and gas production (such as potash mining, storage facilities or waste facilities) would be exempt from submitting a security deposit.
Requirement for Security Deposit
Under the LLR Program security deposit assessments are conducted in association with:
- Monthly LLR assessments conducted by the ministry (after the 28th).
- Proposed well and/or facility licence transfer applications.
Refer to the Directive PNG025 Licensee Liability Rating (LLR) Program for more details on the security deposit calculation and assessment processes.
Submitting Security Deposits
Security deposit payments must be submitted within 30 days of a notice provided by the ministry.
The security deposit notice will mailed out to the address provided on IRIS/Petrinex. Therefore, the onus is on the licensee to ensure the current address is on file so communications will not be delayed. If a correction is required please contact ER Service Desk.
Failure to Submit a Security Deposit within the Required 30 Days
Where a licensee fails to provide a security deposit for a pending licence transfer, within the required 30 days, the Ministry of Energy and Resources would deny the licence transfer application.
Where a licensee fails to provide security deposit payment related to a monthly assessment, within the required 30 days, the amount owing is a debt to the Minister and may be collected in any manner the Minister considers appropriate, including in the manner provided in section 53.2 of The Oil and Gas Conservation Act. Prior to obtaining a court issued judgment against the licensee to collect the outstanding debt, the Ministry may issue a series of Minister’s Orders requiring the licensee to suspend operation, abandon wells, decommission facilities, or reclaim well/facility sites by a given date in lieu of the security deposit payment. Further details on the possible enforcement actions are provided in the Directive PNG025 Licensee Liability Rating (LLR) Program.
Submit a Security Deposit Payment
Security deposit payments should be made payable to the Minister of Finance – The Oil and Gas Orphan Fund and submitted along with the applicable invoice stub/remittance voucher to:
Ministry of Energy and Resources
1000, 2103 - 11th Avenue
REGINA SK S4P 3Z8
NOTE: If the cash payment is being submitted on behalf of another licensee to cover their debt owing, please ensure this is communicated with the submission so that payment can be applied to the appropriate account.
Acceptable forms of security deposit payment include:
- Cheque/Bank Draft
- Electronic Funds Transfer (EFT)
- Direct Deposit
- Online Payments
- Wire Transfer
- Irrevocable Letter of Credit (LOC)
- Obtained, by the licensee required to pay the security deposit, from a recognized Canadian Bank, Credit Union, or Trust Company guaranteeing payment upon presentation to the issuer.
- Only renewable LOCs will be accepted.
- Please complete either the LOC Form or Amended LOC Form which are mandatory for acceptance.
NOTE: A licensee may change their security deposit payment method at any time. However, the existing form of security deposit will be held until the replacement security deposit has been received and processed by the Ministry.
Questions related to the security deposit payment methods should be directed to the ER Service Desk at 1‑855‑219‑9373 or ER.email@example.com.
A licensee can determine if they are in an overpayment situation (i.e. where security deposit received is greater than the security deposit required) by reviewing their monthly Licensee Liability Inventory Report.
The amount of refund the licensee would be eligible for would be dependent on their LLR (which has been maintained or improved each month for six consecutive months). For instance, where the licensee’s:
- Current LLR ≥ 1.0, the licensee would be entitled to a full refund of the security deposit held on account.
- Current LLR < 1.0, the licensee would be entitled to a partial refund of the security deposit. The amount refunded would be equivalent to the overpayment amount seen in the first month of the six consecutive months.
The Ministry will waive the six month waiting period for a licensee in an overpayment situation, who is actively working towards reducing the liability for which a security deposit is being held. A licensee would be eligible for a full refund of the security directly related to the abandonment and/or reclamation liability where:
How to Apply
To apply for a security deposit refund the licensee must:
- Ensure the eligibility criteria are met.
- Complete the Security Deposit Refund Request Form. The form must be printed on company letter head and signed by the licensee’s president or signing officer. When completing the form, please be advised that:
- Cash refunds will be returned to the party that submitted the original payment. Therefore, if the company has amalgamated or changed names this information should be included in the request.
- The licensee’s mailing address indicated in the letter will be verified against the contact information on IRIS, as cheques (for cash payments) will be mailed to the address in IRIS. The licensee may include in their request to have the money refunded through direct deposit; if the licensee is not already set up for direct deposit, the ministry will contact you prior to the refund or you can contact ER Service Desk to get set up.
- Where the security deposit being held is a LOC, it is the licensee’s responsibility to confirm the bank mailing address as well as the bank contact’s name, phone number, and email address.
- Submit the signed/completed form as a single PDF document (no security applied), orientated so they can be read on a computer screen, to ER.firstname.lastname@example.org with subject line “Security Deposit Refund Request.”
- The status of the application is communicated to the licensee via email and further instruction will be provided as to how the refund will be processed. For instance:
- Full/partial cash refund – the ministry will return the cash to the party that originally submitted the payment.
- Full LOC refund – the ministry will return the original LOC, via registered mail, to the issuing financial institution, after which time the licensee would need to contact the bank to obtain the refund.
- Partial LOC refund – the ministry will provide a letter to the licensee authorizing their request to reduce the LOC. Once received, the licensee would provide the letter to their issuing financial institution to provide an amended or replacement LOC to the ministry.
Where a refund is granted, any further inquiries regarding the timing of the refund should be directed to the ER service desk at 1‑855‑219‑9373 or ER.email@example.com.
Complete and attach the signed Security Deposit Refund Request Form.
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