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Transcript of Canada Benefit Plan
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1.0 INTRODUCTION.............................................................................................................................................11.1 Development Application..............................................................................................................................11.2 Overview .......................................................................................................................................................11.3 Basic Document.............................................................................................................................................31.4 Auxiliary Document Socio-Economic Impact Statement: Sustainable Development ................................41.5 Benefits Plan Amendments............................................................................................................................41.6 Review Process..............................................................................................................................................5
2.0 BENEFITS PLAN SUMMARY........................................................................................................................62.1 Introduction ...................................................................................................................................................6
3.0 STATUTORY REQUIREMENTS....................................................................................................................63.1 Office in the Province....................................................................................................................................63.2 Full and Fair Opportunity and Competitive Basis .........................................................................................63.3 First Consideration: Employment..................................................................................................................73.4 Research and Development and Education and Training ..............................................................................83.6 Disadvantaged Individuals or Groups............................................................................................................93.7 Collective Agreements...................................................................................................................................9
4.0 POLICIES AND PROCEDURES ...................................................................................................................104.1 Project Management ....................................................................................................................................104.2 Supplier Development .................................................................................................................................104.3 Procurement and Contracting ......................................................................................................................114.4 Employment and Training ...........................................................................................................................114.5 Research and Development .........................................................................................................................124.6 Disadvantaged Individuals or Groups..........................................................................................................12
5.0 ASSESSMENT OF THE CAPACITY OF THE NEWFOUNDLAND AND LABRADOR ANDCANADIAN ECONOMIES TO MEET THE REQUIREMENTS OF THE PROJECT.................................14
5.1 Construction.................................................................................................................................................145.1.1 Goods and Services..............................................................................................................................145.1.2 Employment.........................................................................................................................................15
5.2 Production Operations .................................................................................................................................15
5.2.1 Goods and Services..............................................................................................................................155.2.2 Employment.........................................................................................................................................166.0 CONSULTATION, MONITORING AND REPORTING..............................................................................17
6.1 Consultation.................................................................................................................................................176.2 Monitoring and Reporting ...........................................................................................................................17
6.2.1 Pre-development Monitoring and Reporting .......................................................................................176.2.2 Project Monitoring and Reporting .......................................................................................................18
Appendix I: Exploration Benefits Plan Guidance
Appendix II: Guidelines for Research and Development Expenditures
Appendix III: Transboundary Crewing GuidanceAppendix IV: Monitoring and Reporting Guidance
ISBN 1-897101-14-7
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Canada-Newfoundland and Labrador Benefits Plan Guidelines
1.0 INTRODUCTION
1.1 Development Application
The Canada-Newfoundland and Labrador Offshore Petroleum Board (the Board or
C-NLOPB) is responsible for management of the petroleum1
resources in theNewfoundland and Labrador Offshore Area, pursuant to the Canada-
Newfoundland Atlantic Accord Implementation Act, and the Canada-
Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and
Labrador Act (the Acts)2.
The Acts establish the requirements that proponents of offshore petroleum
development projects must fulfill in order to obtain approval for a Development
Application. The Development Application shall be comprised of a Canada-
Newfoundland and Labrador Benefits Plan (Benefits Plan) and a Development
Plan with ancillary documents.
A Benefits Plan Approval is a prerequisite to approving the Development Plan.
The Benefits Plan contains information to satisfy the Board that the provisions of
section 45 of the Acts are respected. The Benefits Plan is the focus of these
guidelines.
The Development Plan describes the general approach of developing a pool or
field and includes information and supporting documentation relating to the scope,
purpose, location, timing and nature of the proposed development as well as
production rates, costs and environmental factors. Proponents should refer to the
Development Plan Guidelines for guidance in the preparation of the Development
Plan and ancillary documents.
1.2 Overview
Section 45 of the Acts makes provision for a Canada-Newfoundland and
Labrador Benefits Plan for any work or activity in the Newfoundland and
Labrador Offshore Area. These Guidelines are presented to assist operators in the
preparation of a Benefits Plan.
The intent of the benefits provisions of the legislation is that the exploration for,
and the development and production of the petroleum resources in the
Newfoundland and Labrador Offshore area make a lasting contribution to the
sustainable development of the Provinces economy. This was the vision or intent
1C-NAAIA, Section 2.
2References are made to the federal version. The Acts can be accessed through the Boards website
(www.cnlopb.nl.ca).
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of the legislators at the time of writing the legislation. The petroleum resource is
finite and exhaustible, and it is the intent of the benefits provisions of the
legislation, that exploitation of these resources creates a lasting economic legacy
for the people of the Province.
The legislation defines a process that is intended to provide an opportunity forbusinesses and persons in Newfoundland and Labrador and Canada to participate
on a competitive basis in the economic opportunities generated by any offshore oil
and gas activity in the offshore area. Therefore, benefits achievements associated
with any activity is an important public policy concern in Newfoundland and
Labrador, and in Canada. As a result,benefits achievements will be monitored and
measured by the C-NLOPB. It is expected these measurements will show an
increasingly positive trend of continuous improvement as the industry and the
local supply community continues to evolve and mature; and, any slippage or
deterioration in these measurements from benchmarks and achievements
established by previous projects of similar scope, or similar concepts andtechnologies will require significant explanatory documentation.
The Acts establish the requirements that proponents of offshore hydrocarbon
development projects must fulfill in order to obtain approval of a Development
Plan Application. Subsection 151.1(1) of the Acts authorizes the Board to issue
and publish in such manner as it deems appropriate guidelines and interpretation
notes with respect to the application and administration of section 45. To assist
proponents in complying with requirements for a Canada-Newfoundland and
Labrador Benefits Plan (Benefits Plan) for a development, the Board has prepared
these Guidelines.
Guidance with respect to Benefits Plans for exploration programs, including
seismic activity,is provided in Appendix I.
The Board stresses the importance of early consultation with operators in the
preparation of a Benefits Plan. This early consultation is intended to assist the
operator in understanding the Boards guidance in preparing a Benefits Plan. The
Boards participation in early consultations with the operator will not prejudice
any decisions the Board may make with respect to a Benefits Plan. However, it is
intended such consultations, if diligently pursued, should facilitate the preparation
of a Benefits Plan, and expedite its consideration by the Board upon its completion
and submission.
Approval of a Benefits Plan is a pre-condition of the approval of a Development
Plan. Approval of a Development Plan is a fundamental decision by the Board. It
therefore must be approved by Ministers subsequent to the Boards approval.
Approval of a Benefits Plan is not a fundamental decision, and therefore not
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subject to subsequent approval by Ministers. However, operators should be aware
that the responsible ministers in the Provincial and Federal governments may issue
to the Board joint directives in relation to Canada-Newfoundland and Labrador
Benefits Plans and any of the provisions thereof. Operators are therefore
encouraged to consult with governments3in the preparation of a Benefits Plan.
Where the word project is used in these guidelines it shall be understood to refer
to all activity associated with the project, which includes both the development
(construction)phase and operations phase. Accordingly, the Benefits Plan should
address both the development and operations phase of a project.
1.3 Basic Document
A Benefits Plan for a project should describe the proponents commitment to, and
plans concerning, the following:
establishment of an office in the Province where appropriate levels of decision-making are to take place;
consistent with the Canadian Charter of Rights and Freedoms, employment ofCanadians and residents of the Province, giving first consideration to residents
of the Province of Newfoundland and Labrador for employment and training
during the project;
participation of Canadian manufacturers, consultants, contractors and servicecompanies and, in particular, giving first consideration to services provided
from within the Province and to goods manufactured in the Province, where
those services and goods are competitive in terms of fair market price, qualityand delivery;
expenditures for Research and Development to be carried out in the Provinceand for Education and Training to be provided in the Province;
provisions to ensure that disadvantaged individuals or groups have access toemployment and business opportunities generated by the project; and,
provisions to ensure manufacturers, consultants, contractors and servicecompanies in the Province and other parts of Canada are given a full and fair
opportunity to participate on a competitive basis in the supply of goods and
services used in any proposed work or activity.
The Plan should also describe the consultative, monitoring and reporting
procedures the proponent intends to establish to achieve these objectives. A
Benefits Plan should be as detailed and specific as possible, and should set out
3The Board normally consults with the following government departments in the administration of benefits matters:
Natural Resources (NR), Human Resources Labour and Employment (HRLE), Education (E), Natural ResourcesCanada (NRCAN), Industry Canada (IC), Atlantic Canada Opportunities Agency (ACOA), and Human Resources
and Skills Development Canada (HRSDC).
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clearly the manner in which the proponent intends to address each of the elements
described above. When preparing a Benefits Plan, the outline of the final
document should correspond to sections 3.0 to 6.0 of the Table of Contents of this
Guideline.
1.4 Auxiliary Document Socio-Economic Impact Statement: SustainableDevelopment
Depending on the nature of a project, the Board may require the proponent to
submit, as part of its Development Application, a document describing how the
development and operational phases of the project will contribute to the
sustainable development of the Province. The concept of a Socio-Economic
Impact Statement (SEIS) is raised in paragraph 44(2)(c) of the Acts in the context
of a public review for a development. Its purpose has been to set out a proponents
analysis of the effects the proposed project is anticipated to have on a variety of
social, demographic and labour market factors, as well as on public infrastructureand other land and resource uses.
The concept of a SEIS is closely related to the concept of sustainable
development. In a modern context, one would expect any SEIS analysis to include
a thorough assessment of sustainable development. Sustainable development has
been defined as development that meets the needs of the present without
compromising the ability of future generations to meet their own needs4. These
concepts are clearly intertwined, particularly in the context of large developments
for the exploitation of a non-renewable resource in a relatively small society and
economy like Newfoundland and Labrador. It is an intent of the legislation, insection 45 and elsewhere, that oil and gas developments be implemented and
managed in a manner that creates a lasting economic legacy for the people of the
Province. Guidance with respect to the contents of this document is provided in
section 1.3.3 of the Boards Development Plan Guidelines.
1.5 Benefits Plan Amendments
At any time during a projects life, where an operator presents a Development Plan
Amendment for consideration by the Board, it should be accompanied by a
complete assessment of the impact such an amendment will have on the approved
Benefits Plan for the project and describe any appropriate mitigating measures and
required amendments to the Benefits Plan. Where, in the operators opinion, an
amendment to the Benefits Plan is not required, a rationale should be provided as
to why this is the case and a determination will be made by the Board. In the case
4United Nations
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where the Board determines a Benefits Plan Amendment is required, it must be
approved prior to approval of the Development Plan Amendment.
1.6 Review Process
The submission and approval of a Benefits Plan is subject to the requirementsestablished by the Acts. One of those requirements is that a Benefits Plan may be
subject to a public review process, unless the Board determines that, in the public
interest, a public hearing is not required.
In the event of a Public Review, a complete description of the Review Process is
contained in Chapter Six of the Development Plan Guidelines.
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2.0 BENEFITS PLAN SUMMARY
2.1 Introduction
The Benefits Plan Summary is a requirement of each Benefits Plan and is intended
for widespread public distribution. This summary should be produced as a separatedocument that provides a sufficiently comprehensive overview of the Benefits
Plan to enable the non-specialist reader to reach an informed opinion concerning
the proposal.
Particular care should be taken in preparing the summary to recognize that most of
the readers will not be specialists. The proponent is encouraged to explain those
technical terms that cannot be avoided. The Summary should be organized to
parallel the more comprehensive Benefits Plan document. When preparing a
Benefits Plan Summary, it should be organized to correspond appropriately to the
Table of Contents of this Guideline.
3.0 STATUTORY REQUIREMENTS
The content requirements of a Benefits Plan are described in section 45 of the
legislation. Each of these requirements is addressed below.
3.1 Office in the Province
The legislation requires that a proponent:
. establish in the Province an office where appropriate levels ofdecision-making are to take place;
This provision requires that an operator establish an office in the Province with
appropriate decision-making authority. The Board would not consider any
application for exploration drilling, development or production activity from an
operator who does not have an office with appropriate levels of decision-making
in the Province.
3.2 Full and Fair Opportunity and Competitive Basis
The legislation requires that the proponent provide:
.manufacturers, consultants, contractors and service companies in the
Province and other parts of Canada with a full and fair opportunity to
participate on a competitive basis in the supply of goods and services used
in any proposed work or activity; and that, first consideration shall be
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given to services provided from within the Province and to goods
manufactured in the Province, where those services and goods are
competitive in terms of fair market price, quality & delivery.
For goods and services, the legislation requires that procurement activities be
conducted ona competitive basis; and, that businesses in the Province and otherparts of Canada must have a full and fair opportunity to participate on a
competitive basis. The competitive basis is further described by the legislation as
one where goods and services are competitive in terms of fair market price,
quality and delivery. The competitive basis therefore has two elements: (i) it must
provide a full and fair opportunity for businesses in the Province and other parts of
Canada to participate, and (ii) its outcome must be determined on the basis of fair
market price, quality and delivery, subject to first consideration to services
provided from within the Province and to goods manufactured in the Province.
This means that not only must contracting procedures not unfairly disadvantage
local suppliers, but the proponent must demonstrate all reasonable efforts havebeen taken to ensure that local suppliers have been afforded an opportunity to
participate in the contracting process on a competitive basis. Also, the contracting
outcome cannot be determined solely on the basis of lowest price.
3.3 First Consideration: Employment
The legislation requires that the proponent provide for:
.the employment of Canadians and, in particular, members of the
labour force of the Province.
Within this context, the legislation requires that:
consistent with the Canadian Charter of Rights and Freedoms,
individuals resident in the Province shall be given first consideration for
training and employment
For the purpose of these guidelines, a Newfoundland and Labrador resident is a
Canadian (or landed immigrant) who meets the residency requirements of the
Province as defined by The Election Act, SNL 1992, CE-3.1, i.e., has resided in the
Province for the immediately preceding six month period.
These requirements are intended to ensure that first consideration for employment
opportunities in the work program for which the Plan was submitted is provided to
residents of the Province.
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The first consideration provision of the legislation clearly requires that the
proponent and its contractors look first to the Newfoundland and Labrador labour
market to meet their human resource requirements. Employers have the right to
establish, in advance of the recruitment process, the qualifications, experience and
competencies required of candidates for employment. However, the first
consideration requirement means that once the requirements for a position havebeen established, a Newfoundland and Labrador resident who meets these
requirements must be given employment preference over non-residents. Further,
the proponent should describe in its Human Resource Plan an approach for the
succession of qualified residents of the Province and other Canadians to any
positions not initially held by such persons (see section 4.4 of these guidelines).
3.4 Research and Development and Education and Training
The legislation requires the proponent to address Research and Development and
Education and Training in the following manner:
. expenditures shall be made for research and development to be
carried out in the Province and for education and training to be provided
in the Province;
Since the legislation simply requires that expenditures be made for these purposes
in the Province, latitude is left to the Board to establish parameters and criteria for
such expenditures. Appendix II provides these criteria.
3.5
First Consideration: Procurement
The legislation requires that:
. first consideration shall be given to services provided from within the
Province and to goods manufactured in the Province, where those services
and goods are competitive in terms of fair market price, quality and
delivery.
The intent of the legislation is to ensure full and fair participation within a
competitive context for manufacturers, consultants, contractors and service
companies in the Province and other parts of Canada. It would therefore be
acceptable for proponents to limit bidding to Canadian providers; or, in the
event there is a single provider in Canada, to sole source that provider. The
first consideration provision of the Acts applies to services provided from
within the Province and to goods manufactured in the Province, where these
are competitive in terms of fair market price, quality and delivery. Further to
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the guidance provided in section 3.2 above, the Board interprets that it is
consistent with the first consideration intent of the legislation if an operator
chooses to limit bids to providers from the Province, if there is competitive
capacity in the Province. Also, a proponent would be meeting this intent of the
legislation if it chooses to sole source in the Province if there is only one
provider in the Province.
3.6 Disadvantaged Individuals or Groups
The legislation requires a proponent to describe its plans for establishing:
. provisions to ensure that disadvantaged individuals or groups have
access to training and employment opportunities and . to participate in
the supply of goods and services .
Proponents are expected to be proactive in their plan. In the context of the plandisadvantaged groups and individuals are considered to include: women,
aboriginal groups, persons with disabilities and members of visible minorities. The
proponent is expected to review, assess and apply models such as the federal
Employment Equity Act, the Federal Contractors Program, and other models as
appropriate in preparing its action plans in this regard. Such plans will normally
encompass employment equitymeasures with an explicit objective to facilitate the
participation of disadvantaged groups and individuals.
3.7 Collective AgreementsParagraph 45(3)(b) of the Acts stipulates that a collective agreement may not
frustrate access to training and employment opportunities for residents of the
Province; this applies particularly to disadvantaged individuals or groups.
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4.0 POLICIES AND PROCEDURES
The proponents commitment to the statutory requirements as described in the
preceding sectionsshould be reflected in its proposed policies and procedures for
planning and executing the project. The acceptability of the proponents policies
and procedures will be determined by its commitment to the six categoriesdiscussed in this section. Also, the proponent should prepare for the Boards
review a management systems and procedures manual to ensure the coordination
of,and adherence to, Canada-Newfoundland and Labrador benefits commitments
among all clients and contractor groups involved in the project. The systems and
procedures manual should specify clearly that contractors have the same level of
obligation to the proponents benefits commitments as does the proponent. This
document should be submitted at the same time as the Benefits Plan.
4.1 Project Management
Project management and engineering services can represent significant benefits to
Canada and Newfoundland and Labrador in every project. The proponent should
describe its approach to the management and engineering of the project, including
its plans concerning:
establishment of an office in the Province in accordance with paragraph45(3)(a) of the Acts;
extent and type of participation by Canadian and, in particular, Newfoundlandand Labrador engineering firms and individual contractors, in project
management and engineering activities; and, establishment of management systems and procedures to ensure that its
contractors comply with the proponents commitments in the benefits area.
4.2 Supplier Development
The objective of supplier development is to develop reliable domestic sources of
goods and services including management, technical and engineering support. The
proponent is expected to describe its plans for:
provision of timely information concerning project requirements andspecifications to Newfoundland and Labrador and other Canadian suppliers
and contractors;
assessment of Newfoundland and Labrador and other Canadian supplycapabilities, including the identification of constraints and new supply
opportunities;
initiatives to promote supply opportunities for Newfoundland and Labradorand other Canadian firms;
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transfer of technology and know-how to Newfoundland and Labrador andother Canadian suppliers and contractors;
visits to plant facilities to review procedures, equipment and personnelqualifications to ascertain and develop the competitive capabilities of
Newfoundland and Labrador and other Canadian suppliers; and,
programs, policies or procedures to enable Newfoundland and Labrador andother Canadian suppliers to participate in the proponents national and
international activities.
4.3 Procurement and Contracting
Domestic supplier development could be positively affected by the proponents
procurement and contracting policies. The proponent should describe its plans
concerning:
preparation of bid specifications and packages in such a manner, and on atimely basis, to ensure that they provide full and fair opportunity for qualifiedNewfoundland and Labrador and other Canadian suppliers and contractors to
participate in the bid process;
communication of its bid procedures to qualified Newfoundland and Labradorand other Canadian suppliers and manufacturers on a timely basis;
location(s) of procurement offices, and the names of key procurementpersonnel in Newfoundland and Labrador and other parts of Canada;
requests for Canada and Newfoundland and Labrador benefits information as apart of the bid solicitation process along with a description as to how such
information will be used in the bid selection process; initiatives to ensure that contractors and subcontractors comply with the
provisions of the approved Benefits Plan and provide a definitive statement in
the plan to that effect;
provision of competent and thorough debriefings to unsuccessful bidders whenso requested, which is consistent with CAPPs Industry Recommended
Practice document entitled Atlantic Canada Offshore Petroleum Industry
Supply Chain Management; and,
inclusion of provisions to enable disadvantaged individuals or groups orcorporations owned or cooperatives operated by them to participate in the
supply of goods and services used in the proposed work.
4.4 Employment and Training
The employment of Canadians, and in particular members of the labour force of
the Province, is an essential feature of governments policy concerning offshore
resource development. In recognition of the importance of this matter, the
proponent should be as explicit and detailed as possible on these matters in the
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Benefits Plan, and in any event should, not later than one year preceding first
production, provide an operations phase Human Resource Plan for approval by the
Board. The proponent is expected to address the following in its Benefits Plan:
project organization and staffing for the design, construction and operationsphases;
succession of qualified residents of the Province, and other Canadians, to anypositions held initially by non-Canadians;
education and training programs to be provided in the Province forNewfoundland and Labrador residents and other Canadians to participate in the
project;
specific education and training programs, including associated expenditures, tobe provided in the Province, pursuant to paragraph 45(3)(c) of the Acts (see
Appendix II);
establishment of specific measures and initiatives including reportingrequirements which address the needs of disadvantaged individuals and groupsincluding: women, aboriginal groups, persons with disabilities and members of
visible minorities;
assistance to government departments and agencies and to private and publictraining institutions in identifying and developing suitable employment-related
training programs; and
any planned transboundary crewing requirements between the Newfoundlandand Labrador Offshore Area and any other Canadian offshore jurisdiction. See
Appendix III Transboundary Crewing Guidance.
4.5 Research and Development
Appendix II contains Guidelines for Research and Development Expenditures in
the Province. That document is intended to provide an operator engaged in
petroleum exploration, development and production activities in the
Newfoundland and Labrador Offshore Area with guidance parameters and criteria
for these expenditures in the Province which are required under section 45 of the
Acts.
4.6 Disadvantaged Individuals or Groups
The proponent is expected to be proactive in this regard in its plan. In the context
of the Benefits Plan, disadvantaged individuals and groups are considered to
include: women, aboriginal groups, persons with disabilities and members of
visible minorities. The proponent is expected to review, assess and apply models
such as the federalEmployment Equity Act, the Federal Contractors Program, and
other models as appropriate in preparing its action plans in this regard. Measures
to address the participation of these individuals and groups for employment, and
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for corporations or cooperatives owned by them to supply goods and services for
the project should be covered by the Plan.
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5.0 ASSESSMENT OF THE CAPACITY OF THE NEWFOUNDLAND AND
LABRADOR AND CANADIAN ECONOMIES TO MEET THE
REQUIREMENTS OF THE PROJECT
The Development Plan requires a mode of development decision, which is a
Fundamental Decision, concerning the production system and any alternatives.Guidance for this decision is provided in section 3.9 of the Development Plan
Guidelines. It describes the criteria and analyses which should be provided by the
proponent for that decision. While the Board recognizes the proponent will
construct its Benefits Plan on the basis of the preferred production system, the
information required by section 3.9 of the Development Plan Guidelines should be
appended to the Benefits Plan submitted by the proponent.
The Benefits Plan should provide an analysis of the potential for Canadian
companies, and in particular Newfoundland and Labrador companies to participate
in the engineering, supply, fabrication, construction, operation and supportactivities of the project. A similar analysis of the labour force should be provided
to meet the employment needs of the project. These analyses should be conducted
for the preferred production system, and should incorporate an assessment of the
supplier development, procurement and contracting and employment and
training initiatives, described in sections 4.2, 4.3 and 4.4, to enhance the
participation by persons and businesses in the Province. These analyses should
conclude with an estimate by the proponent of the proportion of work and
employment associated with the project which can be performed by businesses
and workers in Canada, and in particular in Newfoundland and Labrador. Subject
to the outcome of the competitive process described in these guidelines, the Boardencourages proponents to provide, where feasible, estimates of benefits
achievements anticipated from this process.
5.1 Construction
The project construction phase offers significant procurement and employment
opportunities for businesses and persons in the Province. This section offers
guidance for the preparation of a Benefits Plan to facilitate the attainment of these
opportunities.
5.1.1 Goods and Services
The demand for goods and services for the preferred production system should be
estimated, by major component, in terms of quantities, values, timing and probable
sources for each of the following procurement categories:
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materials required in bulk such as steel plate, pipe, tubular goods, fuel,chemicals, etc.;
equipment such as pumps, compressors, motors, wellheads, instrumentation,pressure vessels and tanks; and,
services including engineering and drafting, project management,transportation, diving, drilling and maintenance.
For each of the major components identified, the proponent is expected to provide
a thorough assessment of the ability of the Canadian and, in particular, the
Newfoundland and Labrador economies to participate in the project and to identify
constraints to their participation. The proponent should also provide a description
of those aspects of its contracting strategy designed to facilitate such participation
and a list of major contracts and sub-contracts, in as much detail as is available.
5.1.2 Employment
The annual demand for labour, in person-hours and persons, for each major
component of the preferred production system, should be projected by skill
classification in accordance with Canadas National Occupation Codes (NOC).
These demand estimates should be identified in terms of Newfoundland and
Labrador based and other Canadian based requirements.
The proponent is expected to:
provide an assessment for the availability of Canadian and Newfoundland andLabrador labour to meet this demand and how they might be increased orenhanced;
identify any special training requirements which might be needed to facilitateparticipation by the Canadian and Newfoundland and Labrador labour force;
assess the impact of project demands on the educational infrastructure in theProvince; and,
assess impact of other major projects in the region which may draw on thesame pool of workers as the project being considered.
5.2 Production Operations
5.2.1 Goods and Services
The annual demand for goods and services required to support production
operations, for each major cost category associated with the preferred production
system, should be projected in terms of quantities, values, timing, and probable
sources.
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For each of the major cost categories identified, the proponent is expected to
provide a thorough assessment of the ability of Canadian and, in particular,
Newfoundland and Labrador industry to participate, and to identify any constraints
to its participation. The proponent should also provide a description of the aspects
of its contracting strategy designed to facilitate such participation and a list of
major contracts and subcontracts, in as much detail as possible.
5.2.2 Employment
The annual operating labour requirements, in person-hours and persons, for the
preferred production system should be projected by skill classification in
accordance with the NOC.
The proponent is expected to provide an assessment of the availability of Canadian
and Newfoundland and Labrador labour to meet this demand and to identify any
special training requirements which might be needed to maximize the Canadianand Newfoundland and Labrador labour force participation.
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6.0 CONSULTATION, MONITORING AND REPORTING
This section of the guidelines outlines the general requirements for consultation
with the Board during the preparation of the Benefits Plan and for monitoring and
reporting during the life of the project.
6.1 Consultation
The proponent should initiate and maintain timely consultation with the Board
during the preparation of the Benefits Plan. The Board will consult with the
appropriate government departments and agencies concerning their objectives
related to matters to be dealt with in the Benefits Plan and will inform the
proponent of those objectives. This consultation is not intended to limit in any way
direct contact between the proponent and a department or agency of government
with respect to their objectives (see section 1.2).
6.2 Monitoring and Reporting
6.2.1 Pre-development Monitoring and Reporting
The Exploration Benefits Plan Guidance (see Appendix I) makes provision for the
monitoring and reporting of post-discovery activities, i.e., pre-development
activities conducted prior to the approval of a Benefits Plan for a field
development. Any pre-development procurement and contracting activity, which
is in support of preparing a development application, will be monitored in
accordance with the provisions of the approved Exploration Benefits Plan.
An operators activity with respect to any long lead procurement or contracting for
the project under consideration, prior to the approval of the project Benefits Plan,
will be at the operators own risk, if it does not conform to the Benefits Plan which
is subsequently approved. However, this risk may be mitigated to the extent such
activity is conducted in accordance with these guidelines, and to the extent there
have been diligent consultations. The Board will monitor all pre-approval
contracting activity, which is in support of the construction phase of a
development, in accordance with the monitoring framework described in
Appendix IV. In monitoring this process, the Board is in no way prejudicing any
decisions it may take in approving the Benefits Plan or the Development Plan.
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6.2.2 Project Monitoring and Reporting
Effective monitoring and reporting of procurement decisions, employment levels
and expenditures are necessary to ensure that the principles of the Benefits Plan
are being followed and its commitments are being met.
The proponent is expected to describe its plans for monitoring, and reporting on
the efforts of both itself and its contractors in achieving benefits to Canada in
general, and to Newfoundland and Labrador in particular.
It is the Boards intention to review all procurement and contracting decisions,
which have significant national or provincial implications, and to require
submission, by the proponent, of project expenditure and employment reports on a
regular basis. Suggested formats for the Boards monitoring and reporting
requirements for development phase procurement are described in Appendix IV of
this document. The Board will also consider alternative monitoring and reportingsystems proposed by a Proponent.
For each major work or activity, which is to be executed in the Province, in the
offshore area or in another part of Canada, upon award of contract, the proponent
shall provide the Board with a complete and detailed description of the work
commitments for the Province and Canada. The proponents performance will be
measured against these commitments.
The proponent shall submit Canada-Newfoundland and Labrador Benefits Reports
on a quarterly and annual basis, in a format satisfactory to the Board. Such reportsshall be shared with the public. Quarterly reports should include an assessment by
the proponent with respect to identified goals and objectives stated in the plan.
Six months before the expiry of an operators Production Operations
Authorization (POA), the operator shall provide an assessment of the results of the
application of the approved Benefits Plan during the term of the authorization and
the potential for realizing further improvements.
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Table Of Contents
1.0 INTRODUCTION ............................................................................................................. 12.0 STATUTORY REQUIREMENTS.................................................................................... 23.0 POLICIES AND PROCEDURES ..................................................................................... 34.0 FORMAT OF A BENEFITS PLAN.................................................................................. 5
4.1 Description of Work Program ..............................................................................................................54.2 Statutory Requirements and Policies and Procedures...........................................................................5
5.0 MONITORING AND REPORTING ................................................................................ 65.1 Contract Notification............................................................................................................................65.2 Annual Report ......................................................................................................................................6
Appendix I-A: Well Expenditure ReportAppendix I-B: Annual Expenditure SummaryAppendix I-C: Annual Employment Summary
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Canada-Newfoundland and Labrador Exploration Benefits Plan Guidance
1.0 INTRODUCTION
This document is designed to provide an operator engaged in petroleumexploration activities, including geophysical, geotechnical, drilling, etc., in the
Newfoundland and Labrador Offshore Area with guidance for the preparation ofa Canada-Newfoundland and Labrador Benefits Plan (Benefits Plan) which isrequired under section 45 of the Atlantic Accord Implementation Acts (the Acts).The guidance also addresses related contracting, expenditure and employmentreporting requirements.
The document is divided into four principal parts: Statutory Requirements,Policies and Procedures, Format of a Benefits Plan and Monitoring andReporting. Within the context of the monitoring and reporting requirements anoperator is expected to report on post-discovery' activities, i.e. pre-developmentactivities conducted prior to the approval of a Benefits Plan for a fielddevelopment, and the provisions of the approved Exploration Benefits Plan shallapply.
This guidance will be administered by the Canada-Newfoundland and LabradorOffshore Petroleum Board (the Board), and may be revised from time to timefollowing consultation with industry.
An operator which plans offshore exploration activity in the Labrador offshorearea is further directed to consult the Labrador Inuit Association (LIA) LandClaims Agreement for provisions affecting any planned activity.
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2.0 STATUTORY REQUIREMENTS
An Exploration Benefits Plan must address key statutory provisions from section45 of the Acts. The Boards requirements with respect to these provisions is fully
described in section 3.0 of the Guideline.
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3.0 POLICIES AND PROCEDURES
When reviewing an operators commitment to the statutory requirementsreferenced in section 3.0, the Board will review the policies and procedures that
an operator proposes to follow in the planning and execution of its program. TheBoard will consider the size and scope of a program, as well as the prevailingsocio-economic circumstances, in determining the acceptability of the operatorsproposed policies and procedures. When preparing a Benefits Plan, an operatorshould state its intentions, if applicable, concerning:
the establishment of an office in the Province in accordance with paragraph45(3)(a) of the Acts;
the provision of information concerning its exploration program to concernedindividuals, groups and communities in the Province;
the assessment of Newfoundland and Labrador and other Canadian supplycapabilities and the identification, in documentation prepared for the Board,of new supply opportunities;
its plans for communicating to Newfoundland and Labrador and otherCanadian suppliers and manufacturers, on a timely basis, its requirements forgoods and services, its bid procedures and the names of its key procurementpersonnel;
its plans for visiting, when requested, plant facilities to review procedures,equipment and personnel qualifications to ascertain and develop thecompetitive capabilities of Newfoundland and Labrador and other Canadiansuppliers;
the requesting of Newfoundland and Labrador and Canada benefitsinformation as a part of the bid solicitation process;
the preparation of bid specifications and packages to ensure that they do notunfairly prevent Newfoundland and Labrador and other Canadian suppliers
from participating in the bid process;
the establishment of mechanisms to ensure that its contractors comply withthe company's commitments in respect of Canada-Newfoundland andLabrador benefits;
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the provision of debriefings to unsuccessful bidders when requested, which isconsistent with CAPPs Industry Recommended Practice document titledAtlantic Canada Offshore Petroleum Industry Supply Chain Management.
the transfer of technology and know-how to Canada and in particularNewfoundland and Labrador; specific initiatives or action plans proposed to significantly contribute to
work in Canada or Newfoundland and Labrador from the program;
the utilization of Newfoundland and Labrador and other Canadian firms andinstitutions to undertake research and development, as provided for inAppendix II to the Guideline;
assistance to government agencies and to private and public traininginstitutions in identifying and developing suitable pre-employment trainingprograms;
transboundary crewing (see Appendix III to the Guideline); the succession of qualified Canadians to positions held by non-Canadians
(The Board considers that qualifications should include academicqualifications, qualifying work experience and competent performance); and,
the establishment of measures to achieve the employment equity provisionsof subsection 45(4) of the Acts.
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4.0 FORMAT OF A BENEFITS PLAN
A Benefits Plan, submitted under subsection 45(1) of the Acts, should beprepared according to the following format:
4.1 Description of Work Program
The description of the exploration program should provide an overview of thework proposed and, if applicable, include:
the length, number and duration of geophysical, or other, surveys; the number of wells, with anticipated spud and completion dates; a description of drilling unit(s), seismic vessel(s), and number and type of
support vessels to be used;
a forecast of total program expenditure; a forecast of direct employment associated with the program supported by a
detailed crew roster for marine and technical personnel who will be employedduring the program. The listing should include their residency at time of hireand a rationale to support the use of any foreign workers;
a listing of contracts or procurements greater than $100,000; and A description of the operators plan with respect to seismic processing.4.2 Statutory Requirements and Policies and Procedures
The operator is expected to confirm its commitment to the statutory requirementsof the legislation and to describe the policies and procedures it proposes tofollow in executing the program.
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5.0 MONITORING AND REPORTING
This section outlines the Board's contract notification and expenditure andemployment reporting requirements.
5.1 Contract Notification
To ensure that full and fair opportunity is afforded Newfoundland and Labradorand other Canadian suppliers, the Board encourages early discussion of anoperators procurement and contracting plans. If practical, these discussionscould take place at a pre-program or pre-well meeting.
Specifically, the Board requires notification of an operators or contractorsproposed bidders lists for contracts valued in excess of $100,000 pertaining tothe following items:
drilling units/seismic vessels; service/support vessels; diving services; tubulars and tubular services; environmental services; and, engineering and other pre-development activities.The Board may also require notification of bidders lists for other contracts fromtime to time. When reviewing the proposed bidders lists for these items, the
Board will identify any pre-award notification requirements.
5.2 Annual Report
The Board requires that an operator engaged in exploration activities in theNewfoundland and Labrador Offshore Area submit an annual benefits report.This report should provide a summary of the previous year's activities andinclude the following:
a description of the work activities including time periods during which theactivities occurred;
a well expenditure report, if applicable, by product/service,contractor/supplier and dollar amount for each well location. Appendix I-Aoutlines the Board's suggested reporting format;
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a total annual expenditure summary categorized by major activities.Appendix 1-B outlines the Board's suggested reporting format;
an employment summary, reported in work-months, for the operator and allcontractors dedicated to the program. Appendix I-C outlines the Board'ssuggested reporting format;
a description of Research and Development activities, including associatedexpenditures, undertaken by the company in the province;
a description of Education and Training activities, including associatedexpenditures, undertaken by the company in the province; and,
a discussion of the results from any specific initiatives or "action plans"undertaken by the company.
Annual reports should be prepared on a calendar year basis and should besubmitted to the Board by January 31 of the subsequent calendar year.
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APPENDIX I-A
Well Expenditure Report
Well Name:
Product/Service Contractor/Supplier Expenditure ($)
EquipmentRig(s)Aviation SupportService/Support VesselsOther*
Sub-total
Drilling SuppliesCasing/TubularsCementFuel & LubesDrill Bits/ReamersMud & ChemicalsWellheadOther*
Sub-total
ServicesCoringLoggingTestingDivingCommunicationsCasingEnvironmentalRig PositioningOther*
Sub-total
Logistics/SupportSupport FacilitiesAdmin. & ManagementOther*
Sub-total
TOTAL:
* Since these "other" categories can represent rather large expenditures, pleaseprovide additional information, on separate sheets, showing a breakout of theitems and costs included in these categories.
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APPENDIX I-B
Annual Expenditure Summary
Activity Expenditure ($)
Pre-DrillingGeophysical:
- Acquisition-Processing-Interpretation
OtherSub-total
DrillingEquipmentConsumablesServicesLogistics/SupportOther
Sub-total
Pre-DevelopmentEnvironmentalSocio-economicEngineeringOther
Sub-total
TOTAL
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APPENDIX I-C
Annual Employment Summary
(Work-Months)
Company Total Newfoundland &Labrador Resident
OtherCanadian
Non-Canadian
TOTAL
Notes:
Company includes the operator, drilling contractor(s), service/support vesselcontractor(s) and any other contractors dedicated to the program.
Definitions:
Newfoundland and Labrador ResidentA Canadian (or landed immigrant) who meets the residency requirementsof the province under theElection Act, SNL 1992, CE-3.1, i.e. has residedin the province for the immediately preceding six month period.
CanadianA person who was born in Canada and who has not relinquished his/herCanadian citizenship; or, a person who has been granted Canadiancitizenship; or, a person who has been granted permanent resident status(landed immigrant status).
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APPENDIX II
GUIDELINES FOR
RESEARCH AND DEVELOPMENT EXPENDITURES
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Tableof Contents
1.0 The Legislation ................................................................................................................... 1
2.0 Required Expenditure Commitments.................................................................................. 1
2.1 Exploration Phase ........................................................................................................... 1
2.2 Development Phase and Production Phase ..................................................................... 1
2.2.1 Development Phase................................................................................................. 2
2.2.2 Production Phase..................................................................................................... 2
3.0 Eligibility Criteria ............................................................................................................... 2
3.1 Location .......................................................................................................................... 2
3.2 Sources............................................................................................................................ 2
3.3 Research and Development............................................................................................. 3
3.4 Education and Training................................................................................................... 3
4.0 Administrative Criteria and Expenditure Management ...................................................... 3
4.1 Administrative Criteria ................................................................................................... 3
4.2 Expenditure Management ............................................................................................... 4
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R&D Expenditure Guidelines 1
1.0 The Legislation
The legislative requirement for expenditures related to R&D in the Province is contained in Section 45 ofthe Act, and reads as follows:
45(3)(c) expenditures shall be made for research and development to be carried out in the
Province and for education and training to be provided in the Province;
Section 151.1(1) of the Act authorizes the Board to issue and publish in such manner as it deemsappropriate guidelines and interpretation notes with respect to the application and administration of Section45.
This document is intended to provide an operator engaged in petroleum exploration development andproduction activities in the Newfoundland Offshore Area with guidance parameters and criteria for R&Dexpenditures in the Province, which are required under Section 45 of the Legislation. Throughout thisguideline the term Research & Development (R&D) includes Education & Training.
Research & Development represent one avenue whereby the exploration for, and the development andproduction of the petroleum resources in the Newfoundland Offshore area can make a contribution to thesustainable development of the Province. This was the vision or intent of the legislators at the time whenthey inserted the requirement for Research & Development and Education & Training in the Provinceinto the Atlantic Accord legislation. The petroleum resource is finite and exhaustible, and it is the intent ofthis provision of the legislation that its exploitation create a lasting economic legacy for the people of theProvince. This is best achieved by building on the intellectual capital and human resources of the Province.Achievement of this legislative intent is a key reason why some parameters or guidance are required inrespect of the requirement in the Act that there be expenditures in the Province for R&D. These guidelinesseek to establish such parameters.
The level of R&D expenditure by operators is expected to be consistent with the norms for suchexpenditures by the upstream petroleum industry in Canada. While the expenditures must be in the
Province, Canadian tax criteria will be used as a general guide to determine other eligibility criteria.
R&D expenditures are viewed by the Board to be strategically important contributions to growth andsustainable development associated with the offshore petroleum sector in the Province.
2.0 Required Expenditure Commitments
R&D expenditures in the development phase of projects tend to focus primarily on education & trainingactivities, whereas it is expected that in the production phase there will tend to be more focus on research &development activities. Both will be legitimate and eligible expenditures in either phase of a project.Further an operator, or group of operators, may propose an R&D program in lieu of the requirement of theguidelines. The acceptability of such a proposal will be assessed by the Board.
2.1 Exploration Phase
From 2003 on, during the exploration phase, R&D expenditures up to a maximum of 5 percent of theexpenditure bid will be allowed.
2.2 Development Phase and Production PhaseIn the absence of experience on which to base a benchmark for such expenditures, the C-NOPB examinedthe levels of such expenditures by petroleum companies in Canada. These data (Statistics Canada,
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R&D Expenditure Guidelines 2
Catalogue No. 88-202-X1B) reveal that R&D expenditure by oil and gas extracting companies in Canadaaveraged about 0.6 percent of revenue between 1995 and 2000.Establishing a benchmark (B) based on industry practice in Canada seems to be a reasonable approach andthe Board will apply the most recent five-year data reported by Statistics Canada. The Total R&Dexpenditure (TRr&d) during the development and production phase will be determined by the Statistics
Canada benchmark for oil and gas extraction companies, total recoverable oil (RO) as defined by theapproved Development Plan and the long term oil price (LTOP) as follows:
TRr&d= B x (RO x LTOP)
A similar calculation will apply to the production of Natural Gas Liquids and Natural Gas.
2.2.1 Development Phase
Experience to date has been that R&D expenditures during the development phase of a project haveamounted to approximately 0.5 percent of total project capital cost (C). The C-NOPB accepts this as areasonable R&D expenditure level for the development phase of a project. The development phase R&Dexpenditure (DPr&d) will be calculated as follows:
DPr&d= 0.005 x C
2.2.2 Production Phase
The production phase R&D expenditure requirement will be calculated for each project for the periodcovered by each Productions Operations Authorization (POA) issued by the Board.
The production phase R&D expenditure requirement (PP r&d) will be calculated as the difference betweenthe Total Requirement (TRr&d) and the development phase requirement (DP r&d), as follows:
PPr&d= TRr&d DPr&d
The production phase expenditure requirement will be distributed over each POA period during theproduction life of the project in proportion to production. In other words the requirement for each POAperiod will be the same proportion of the production phase R&D expenditure requirement as production inthat POA period is of total anticipated project production.
At the end of each POA period, there will be a re-calculation based on actual production levels and prices.
3.0 Eligibility Criteria
The Board seeks a definition of R&D that is reasonable and consistent with that contemplated by theLegislation. The definitions suggested below are not considered exhaustive, and the Board will considerother reasonable areas of expenditure proposed by an operator as appropriate, on a case-by-case basis.
3.1 Location
In order to be eligible, any R&D expenditure must occur in the Province of Newfoundland & Labrador.
3.2 SourcesExpenditures by operators and their contractors and sub-contractors may be considered.
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R&D Expenditure Guidelines 3
3.3 Research and Development
For the purposes of these guidelines R&D may include:
- R& D activity in the Province- Increased R&D capacity in the Province- Education & Training activity/capacity in the Province as discussed in 3.4 belowThe definition of research and development, as referenced in Section 45 of the Legislation, includes, but isnot limited to Section 248(1) of the Income Tax Act, which defines Scientific Research and ExperimentalDevelopment as follows:
The systematic investigation or search that is carried out in a field of science or technology by means ofexperiment or analysis and that is:
(a) basic research,(b) applied research, or(c) experimental development,and, in applying this definition, includes(d) work undertaken with respect to engineering, design, operations research, mathematical
analysis, computer programming, data collection, testing or psychological research,where the work is commensurate with needs, and directly in support, of work describedin (a), (b), or (c) that is undertaken in the Province.
In addition to the elements included in the above definition, eligible R&D expenditures may extend beyondscience and technology to include research in such areas as fiscal regimes, business models and socio-eocnomic and environmental matters.
3.4 Education and Training
For the purposes of these guidelines the definition of education and training in the Province, as
contemplated in Section 45 of the Legislation, shall include expenditures for any or all of the following:
Support for the establishment and/or maintenance of education and training infrastructure; Support for technology transfer or including the advancement of trades training; Support for Chairs and Fellowships Scholarships and work terms including provincial residents who may study or work outside the
Province
Expenditure associated with wages and salaries of employees engaged in specific job training andregulatory training requirements are not considered to be an eligible category of expenditure.
4.0 Administrative Criteria and Expenditure Management
4.1 Administrative CriteriaThe operator shall file an R&D and E&T Expenditure Application Form (see attached form) for each R&Dand E&T activity it plans to undertake. The form shall be submitted to and reviewed by the Board forapproval, prior to commencement of the activity. The Board will undertake to review an Application withinfive working days from receipt. The operator will be notified in writing of the results of this review.
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R&D Expenditure Guidelines 4
1. A separate abstract of the activity, where applicable, shall be submitted with the ApplicationForm.
2. A copy of the research report, where applicable, shall be submitted to the Board uponcompletion.
3. Written verification that an approved activity has been completed.An Operator is required to submit a report in the 1st quarter of each calendar year describing its R&Dexpenditures in the previous year and its R&D expenditure plans for the current year. The Board will reviwthis report in respect of the operators plan for the period.
4.2 Expenditure Management
A successful R&D program should not fluctuate widely. Therefore, for any POA period in which there arenot sufficient projects to absorb the required level of expenditure, the balance may be placed in a R&Dfund. The fund will be managed by the Board in conjunction with the operator consistent with theseguidelines. In a POA period where an operator overspends its R&D requirement, the excess may be appliedagainst its requirement in the subsequent POA period.
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R&D Work Expenditure Application Form
Project: ____________________________________________
Phase: Exploration Development Production
Activity:
Research and Development Education and Training
Amount Expensed $___________________________________
Source of Funding Operator Contractor Subcontractor
Location of Activity ____________________________________
Receiving Institution ____________________________________
Begin Date _______________ End Date _________________
Classification of R&D
Engineering Testing or Psychological Research
Design Fiscal Research
Operation Research Business Models
Mathematical Analysis Environmental Research
Computer Programming Socio-Economic Research
Other ____________________________________________________________________
Description of R&D Activity:
Classification of E&T
Support of E&T Infrastructure Scholarships
Technology Transfer in Trades Work Terms for Students
Chairs and Fellowships
Other _____________________________________________________________________
Description of E&T Activity:
Signature: __________________________________ Date: __________________________________
For C-NOPB Use Only CNOPB File No.
_______________________
A roved: Yes No
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Transboundary Crewing Guidance
Offshore oil and gas activities from time to time involve the use of transboundary
vessels - vessels that move between Newfoundland and Labrador and any other
Canadian offshore jurisdiction for multi-well programs or similar offshore
activity. It is recognized that there is a need for policy change to not only ensure
that the safety of offshore workers is not compromised but also to provide for the
efficient and effective operation of such rigs and vessels. The C-NLOPB andCNSOPB acknowledged these challenges and in 2002 reached an accommodation
on the crewing of the drilling rig Eirik Raude and associated support vessels.
In recognition of the need to move toward a longer-term crewing approach/policy
for drilling rigs and support vessels which are planning to work in more than one
provincial jurisdiction, the following policy applies:
operators/companies responsible for drilling rigs and support vessels
that operate transboundary vessels respect the spirit and intent of the
Accords over the planned period by crewing such vessels with aproportionate mix of other Canadian and Newfoundland and
Labrador residents based on the expected time spent working in the
respective jurisdictions.
This action shall be taken only to the degree that it is achievable recognizing the
need for competent and qualified crews as required for the safe operation of these
vessels. Any distribution of crewing by residency shall respect an equitable
occupational split.
For the short term deployment of support vessels, less than 90 days,vessel owners/operators will be given full flexibility with respect to
crewing. Any contract(s) extending beyond 90 days will follow the
policy as outlined above for longer-term crewing.
Notwithstanding this policy change, it is clearly understood that operators will
continue to manage their operations from the offshore area for which an
authorization was issued. This guidance will be reviewed for effectiveness on a
regular basis.
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Table of Contents
1.0 INTRODUCTION ........................................................................................................................... 12.0 QUARTERLY PROCUREMENT FORECAST ............................................................................. 2
3.0 REVIEW PROCEDURES............................................................................................................... 33.1 Prequalification Stage.................................................................................................................. 33.2 Bidders List Stage........................................................................................................................ 33.3 Award Stage ................................................................................................................................ 43.4 Timing ......................................................................................................................................... 4
4.0 QUARTERLY PROCUREMENT REPORT .................................................................................. 5
Appendix IV-A: Quarterly Procurement ForecastAppendix IV-B: Prequalification NotificationAppendix IV-C: Bidders List NotificationAppendix IV-D: Award Notification Form
Appendix IV-E: Quarterly Procurement ReportAppendix IV-F: Canadian General Standards Board Definition of Canadian Content
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Monitoring and Reporting Guidance
1.0 INTRODUCTION
This guidance is intended to provide a framework for the Canada-Newfoundlandand Labrador Offshore Petroleum Boards review of designated contracts,subcontracts and purchase orders associated with development phase procurement
for a project in the Newfoundland and Labrador Offshore Area, includingcontracting and procurement by all contractors and subcontractors. The frameworkcomprises three main elements:
Quarterly Procurement Forecast; Review Procedures; and, Quarterly Procurement Report.It is the Boards expectation that the number of contracts, subcontracts andpurchase orders designated for review by the Board will not exceed 20% of all
contracts, subcontracts and purchase orders $250,000 Cdn.
Any contracts, subcontracts or purchase orders < $250,000 Cdn. which in theBoards opinion may be sensitive, will also be subject to this guidance.
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2.0 QUARTERLY PROCUREMENT FORECAST
The Board requires, thirty days prior to the first day of each quarter, a listing of all
contracts, subcontracts and purchase orders, $250,000 Cdn., which willcommence the contracting process in the upcoming quarter. For each contract,
subcontract and purchase order this listing should provide:
a description of the service(s)/item(s) to be contracted/purchased (material andequipment specifications shall be provided upon request);
estimated value of contract, subcontract or purchase order:- (10%) for direct contracts and purchase order,- (20%) for subcontracts and sub-orders; and,
anticipated RFP issuance date, RFP closure date and award date.Appendix IV-A provides a suggested format for the Quarterly ProcurementForecast.
The Board will advise the operator, by the first day of each quarter, whichcontracts, subcontracts and purchase orders have been designated by the Board forreview.
The Board shall be informed of all additions and changes to the forecast and shalladvise the operator of its contract review requirements accordingly.
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3.0 REVIEW PROCEDURES
This section outlines the procedures for reviewing those contracts, subcontractsand purchase orders designated by the Board under section 2.0 of this guidance.
3.1 Prequalification Stage
At the prequalification stage, prior to issuing a prequalification questionnaire toprospective bidders, the Board requires the following:
a description of the scope of work; a copy of the prequalification questionnaire, if these documents differ from the
standard prequalification questionnaires previously reviewed by the Board;
a list of companies, indicating locations of head offices, to whomquestionnaires will be issued; and, anticipated dates for closure of prequalification and issuance of a Request for
Proposals (RFP) or a Request for Quotations (RFQ).
Appendix IV-B provides a suggested notification format.
3.2 Bidders List Stage
At the bidders list stage, prior to issuing a RFP or RFQ, the Board requires thefollowing:
list of bidders; a copy of the RFP/RFQ; (the Board will advise the operator of its requirements
in this regard on a case by case basis);
a description of corporate ownership (main shareholders by percentage) ofbidders;
location(s) of any Canadian based offices/plants/facilities; anticipated dates for closure of bids and award of contract/purchase order.Appendix IV-C provides a suggested notification format.
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3.3 Award Stage
At the award stage, prior to the award of contract/purchase order to the selectedbidder, the Board requires the following:
the name of the selected contractor/vendor; a listing of designated sub-contractors/sub-vendors; where applicable, a listing of proposed sub-contractors, sub-vendors and sub-
suppliers;
for construction/service contracts; the estimated Canadian and Newfoundlandand Labrador employment (in person-hours);
contract/purchase order commencement and completion dates; award rationale (evaluation of bids):
- % difference in price between selected bidder and each bid,- primary location(s) of work associated with each bidder,- estimates of Canadian and Newfoundland content associated with each
bidder calculated in accordance with the Canadian General Standards Boarddefinition of Canadian Content (CAN2-147.3-82) (Refer to AppendixIV-F). The definition of Newfoundland Content shall be the samedefinition as Canadian Content except that imported costs refer to costs
incurred in all areas outside the Province of Newfoundland and Labrador,- other information relevant to the evaluation of bidders including whereapplicable, a summary of the technical, commercial and Canada-Newfoundland benefits aspects of the bid evaluations; and
- provisions with respect to participation of disadvantaged individuals andgroups, where applicable.
C-NLOPB Award Notification Form signed by an appropriate official of theoperator (Refer to Appendix IV-D).
3.4 Timing
The Board will conduct its reviews within the following timeframes:
Prequalification review - 5 Board working daysBidders list review - 3 Board working daysAward review - 2 Board working days
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4.0 QUARTERLY PROCUREMENT REPORT
The Board requires that the operator submit, within thirty (30) days of the end of
each quarter, a listing of all contracts, subcontracts and purchase orders, $250,000 Cdn., awarded in the previous quarter. This listing should provide:
item/service; estimated value of contract/purchase order: name of successful contractor/vendor; primary location of work; estimates of Newfoundland and Labrador and Canadian content; and, commencement and completion date.Appendix IV-E provides a suggested format for the Quarterly ProcurementReport.
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APPENDIX IV-A
DEVELOPMENT PROJECTQUARTERLY PROCUREMENT FORECAST
(Suggested Reporting Format)
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Development ProjectQuarterly Procurement Forecast
(For all Contracts/POs $250,000)
Ref. # Item/Service Description Estimated ValueRFP IssueDate
RFP CDate
Note: This forecast should be organized by product/service category or by project component to fC-NLOPB.
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DEVELOPMENT PROJECTPREQUALIFICATION NOTIFICATION
(For all Contracts/POs Designated by C-NLOPB)
Reference #: ________________ Item/Service: ______________________________ Estimated Valu
Prequalificaton Closure Date: ____________ RFP Issuance Date: _______________
Description of Scope of Work: _____________________________________________________________________________________________________________________________________________________________
Prequalification Questionnaire to be issued to:
Company Name Location/Address of Head Office Remarks
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APPENDIX IV-C
DEVELOPMENT PROJECT
BIDDERS LIST NOTIFICATION
(Suggested Reporting Format)
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DEVELOPMENT PROJECTBIDDERS LIST NOTIFICATION
(For all Contracts/POs Designated by C-NLOPB)
Reference #: ___________ Item/Service: ____________________________ Estima
Bid Closure Date: ____________ Award Date: ____________________________
Bidder Corporate Ownership(List Main Shareholders by %)
Canadian BOffice/Plan
For each Canadian company not selected to the bidders list, please provide a complete explanation:
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APPENDIX IV-D
DEVELOPMENT PROJECT
AWARD NOTIFICATION FORM
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DEVELOPMENT PROJECT
AWARD NOTIFICATION FORM
Reference #: _________________ Item/Service: _________________________________
Selected Contractor/Vendor: ____________________________________________________________
Commencement Date: _________ Completion Date: ____________ Est. Value:______________
Estimated Employment (Person-hours) for Construction/Service Contracts:
Newfoundland: _________ Other Canada: _______ Foreign: ________ Total: _____________
Designated Sub-contractors/Sub-vendors:
1. _____________________ 2. _____________________ 3. _______________________
EVALUATION OF BIDS% Content
Bidder % of PriceDifference
Primary Location(s)of Work
Cdn. Nfld.
Other rationale (where