Part IV of the Mining Act provides authority to issue oil and gas exploration licences, production leases, storage leases and salt mineral leases for solution mining on Crown land in Ontario.
Regulation 263/02 under Part IV of the Mining Act provides the administrative requirements for Crown licences and leases.
Map showing Blocks grid system on Lake Erie and Lake St. Clair.
The majority of actively licensed or leased Crown lands for oil and gas mineral rights are located within Ontario’s 1.2 million hectare portion of Lake Erie. A grid system of Blocks and Tracts has been established in this area to describe the land for licensing and leasing. A block is a 5 minute longitude by 5 minute latitude numbered area and a Tract is a 1 minute longitude by 1 minute latitude alphabetically labelled area within a Block. Each Tract is approximately 255 hectares.
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| The Dundee Oil and Gas Limited gas well drilling barge in operation on Lake Erie. Photo provided courtesy of Dundee Oil and Gas Limited |
Oil and Gas mineral rights for exploration licences are acquired through a tendering process. Tender notices are posted in the Nickels Daily Oil Bulletin, the Ontario Petroleum Institute’s newsletter and BIDS "an electronic publisher that distributes tenders and tender information to subscribers" (operated and owned by Tendering Publications Ltd based in New Brunswick), within two weeks following each calendar quarter (March, June, September and December). The highest cash bid determines the successful bidder. Successful bidders and amounts are posted in the above-mentioned publications within 2 days after the tender opening.
The drilling for and production of oil from wells located offshore is prohibited by regulation and provincial policy. Licensees encountering oil in an offshore well must permanently seal the oil bearing zone behind cemented steel casing or plug the well and surrender the Crown land licence or lease. In the latter case natural gas exploration licence mineral rights may be retained. Oil pools located under water covered areas may be produced from land-based deviated or horizontal wells.
