Pursuant to the Royalty Regulations, 2003 (the Regulations) the Terra Nova Reference Price Committee (the Committee) has been established to determine a reference price. Specifically, the Committee’s main objective is to establish a monthly Terra Nova crude oil reference price to be used for royalty calculation purposes, particularly for non-arm’s length transactions.
The general criteria and principles upon which a reference price should be established are detailed in the regulations. However, key decisions on inputs and processes are made by the Committee.
The Committee consists of three members: one is appointed by the interest holders in the Terra Nova project; one is appointed by the Minister of Natural Resources; and, a Chairperson as appointed by the two members of the Committee.
81. (2) Not later than 60 days after the publication of these regulations in the Gazette , the interest holders in the lease under this Part and the minister shall appoint a reference price committee.
(6) The reference price committee shall consist of 3 members
(a) one of whom shall be appointed by the interest holders;
(b) one of whom shall be appointed by the minister; and
(c) one of whom shall be the chairperson appointed by the members referred to in paragraphs (a) and (b).
(7) The chairperson appointed under paragraph (6)(c) shall not be an interest holder or a representative of the Crown and shall be an expert in oil valuation.
(8) The term of appointment of each member of the committee who is appointed under this section shall be 2 years.
(9) A member of the committee is eligible for reappointment.
(10) The interest holders may, after giving notice to the minister of the intent, remove and replace the member appointed under paragraph (6)(a).
(11) The minister may, after giving notice to the interest holders of the intent, remove and replace the member appointed under paragraph (6)(b).
(12) The chairperson may be removed by the unanimous vote of the members referred to in paragraphs (6)(a) and (b).
(13) Where after the interest holders do not appoint a committee member within 60 days after the time frame referred to in subsection (2), or within 60 days after a vacancy occurs on that committee, the minister may appoint that member.
(14) Where the 2 appointed committee members, within 30 days after their appointment or within 30 days of the vacancy of the office of the chairperson, do not appoint a chairperson, the matter may be referred to the Trial Division and a judge of the Trial Division shall make that appointment.
The provincial appointee would be making arguments to maximize the reference price. The appointee should:
A legal background would be a preferable asset.
Members of the Committee should be available to meet once a month. Committee members may also be expected to spend additional time to review and prepare materials for Committee meetings.
Pursuant to the Royalty Regulations, 2003 the term of each member of the Committee shall be 2 years.