The Assignment and Registration of Crown Mineral Interests: With Particular Reference to the Canada Oil and Gas Act

Vernon V. Kakoschke was a lawyer in the law department of Canadian Pacific.

This working paper provides an in-depth legal analysis of several difficult issues relating to the registration of mineral interests acquired from the Crown. When the Liberal government implemented the National Energy Program in 1982, it passed the Canada Oil and Gas Act. The new Act established a system for the acquisition and disposition of certain oil and gas rights (i.e., exploration agreements and production licences) on lands owned by the federal Crown (e.g., lands off the coasts and in the Northwest Territories).

Unfortunately, the new Act did not adequately deal with the technical aspects of transferring and registering interests in exploration agreements and production licences. As a result, it became extremely difficult for a purchaser of any such mineral interests to verify that he was getting good title or for a lender to finance an exploration project when it was not possible to register a security interest.

After pointing out these technical deficiencies in the Act, the paper examines various types of registration systems that could be adopted to fill the void. It traces the historical development of the registry system for Crown minerals utilized in Alberta from 1930 to 1985 and concludes that there are still some unresolved legal issues inherent in that system. It then analyzes the mineral registry system used in Australia, as there are some close parallels between the Australian and the Canadian statutes. Before offering some tentative conclusions and recommendations on the registration aspects of the Act, the author provides a comprehensive survey of the case law relating to the precise legal nature of the mineral interests in question. He concludes, for example, that a production licence constitutes a profit a pendre and not some other form of legal interest.

This research paper, which was sponsored by the Canadian Institute of Resources Law, is a sound technical study of some current issues in oil and gas law that would assist any practitioner who is ever faced with the task of transferring or registering Crown mineral interests.