Transfers

AER licences and oilfield waste management approvals do not automatically transfer when a purchase agreement has been made. The AER must approve any transfer of AER-licensed wells, facilities (including oilfield waste management facilities), and pipelines. As outlined in Directive 088, a transfer application will trigger a holistic licensee assessment of both the transferor and transferee. We will consider the results of the holistic assessment and other factors when making the decision to approve, approve with conditions, or deny a transfer application.

Licences or approvals that require a site-specific liability assessment will need to review section 6.3 of Directive 011 to ensure that the SSLA meets the requirements for the transfer application.

Additional factors are considered as part of our holistic licensee assessment, including the unreasonable risks outlined in section 4.5 of the updated Directive 067: Eligibility Requirements for Acquiring and Holding Energy Licences and Approvals. Factors we may now consider when reviewing a transfer application include unpaid municipal taxes or surface lease payments. Licensees must disclose the amount of any unpaid municipal taxes or surface lease payments when requested by the AER. It is important to note that the AER is not involved with the collection of unpaid municipal taxes and does not have jurisdiction to implement compliance or enforcement actions related to unpaid municipal taxes. Municipalities remain responsible for the collection and enforcement of their municipal taxes.

Directive 088 and Manual 023 outline that the AER will accept transfer applications for licences that are reclamation certified and reclamation exempt. For example, we may now apply discretion to require licensees to include the transfer of reclamation-certified and reclamation-exempt licences that are part of an insolvency proceeding or corporate clean out. The AER encourages licensees to contact the AER to discuss their specific circumstances with respect to reclamation-certified and reclamation-exempt licences.

For licences with a public lands disposition that needs to be assigned or transferred, licensees must not have arrears in respect of any debts to the Crown or taxes owing to a municipality. The AER will reject applications for assignment when debts are known.

More detailed information on the transfer process can be found in Manual 023: Licensee Life-Cycle Management.

How do I create a licence transfer application?
Access the DDS system and select Applications > Licence Transfer > Submit Licence Transfer Application. Enter all required information and when completed, click the Submit button. The applicant is responsible for contacting the other party to notify that the application has been submitted, as the application requires the second party's acceptance before it is electronically submitted to the AER. Before a licence transfer application will be accepted by the licence transfer subsystem, both parties must confirm that the information contained within the application is correct and accept a declaration stating they have complied with a list of specified AER requirements (refer to Directive 006 for further information).

How do I accept a licence transfer application as the second party?
Access the DDS system and select Applications > Licence Transfer > Submit Licence Transfer Application. Retrieve the existing application from the drop-down menu and review the application information. If the application is acceptable, click the Approve button for the application to be submitted to the AER.

Can I re-enter an abandoned well after it has been transferred?
In order to re-enter any abandoned well, including one that has just been transferred to you, you must first re-establish your licence eligibility by applying under Directive 056: Energy Development Applications and Schedules. Contact D56Helpline@aer.ca for assistance.

How long does a licence transfer application take to process?
Licence transfer applications require a minimum of 30 days to move through the standard review process and are subject to longer timelines depending on the complexity of the transfer. Refer to Bulletin 2017-13: Changes to Process for Transfer Application Decisions and our Approval Transfers page for additional information about the licence transfer application process.

Will I receive a notice of approval when my licence transfer application is approved?
An electronic copy of the approval notification letter will be emailed to both the transferor and transferee contacts listed in the application.

How do I cancel a transfer application that has been submitted to the AER?
A licence transfer application can be cancelled by submitting a request to withdraw the application. This can be submitted in one of two ways:

By email: Requests must be received from both applicants listed on the transfer application, specifically from the email addresses listed on the application. These requests for withdrawal can be emailed to LiabilityManagement@aer.ca.
By physical mail: Both the transferor and transferee company must mail their requests on corporate letterhead. Each letter should be signed. Letters from sister companies, subsidiaries, or parent companies will not be accepted. Letters should be mailed to

Alberta Energy Regulator
Suite 1000, 250 – 5 Street SW
Calgary, Alberta T2P 0R4

Upon receipt of the application withdrawal requests from both parties involved in the transfer, we will process the application as withdrawn and will notify the licensees.

How do I obtain copies of AER licence transfer decisions or a list of all AER licences?
Please contact our Information Distribution Services by phone (toll-free) at 1-855-297-8311 or by email at InformationRequest@aer.ca.

After an amalgamation, how are the licences transferred to the surviving entity?
Once we receive notification of an amalgamation, we review and prompt our system to transfer licences from the nonsurviving to the surviving entity. We complete the process by forwarding a corporate profile update request to the surviving entity to be completed for our records.

What is a regulator-directed transfer (RDT)?
Under section 24(6) of the Oil and Gas Conservation Act (OGCA), we can direct the transfer of a licence to a person who agrees to accept it and who, in the opinion of the AER, has a right to receive it. For instance, this may occur when a party would like to acquire a well that is licensed to an inactive company or that is under the care and custody of the Orphan Well Association (OWA).

What are the requirements for an RDT?
The transferee must

meet our requirements, including eligibility to hold AER licences in accordance with Directive 067: Applying for Approval to Hold EUB [AER] Licences;
provide information regarding their right to hold surface and mineral rights;
include any pipelines associated with the well that they wish to transfer because associated pipeline licences are not transferred automatically; and
be prepared to pay security or meet other conditions we set.

When should the records for a pipeline segment be transferred from the seller (transferor) to the purchaser (transferee)?
The seller must transfer the records for the pipeline segment being sold before the application is made to the AER to transfer the applicable pipeline licence. Both the seller and the purchaser must confirm on the licence transfer application that the applicable records have been maintained and transferred.

Records transfer should be a matter of discussion between the seller and the purchaser before finalizing the sale; consideration should be given to including records-related matters in the contractual agreement.

Who is responsible for ensuring that all required records are transferred?
Both parties are responsible. Sellers are responsible for transferring these records, and purchasers are responsible for ensuring that any records transferred meet the applicable requirements (e.g., have been properly maintained) because these records are what show that the pipeline is safe to operate for the intended purpose. The purchaser should use professional judgement to determine if the records are adequate.

If required records are incomplete, they must be re-established and the pipeline must be proven to be fit for service through an engineering assessment. The purchaser's pipeline expert should use professional judgement to determine the scale of the assessment based on the risk associated with the pipeline. (Clauses 3 and 10 of CSA Z662: Oil and Gas Pipeline Systems should be used as a reference.) We recognize that some records cannot easily be replaced; the engineering assessment should provide confidence that the pipeline can be operated safely.

The new licensee is responsible for producing the records required by CSA Z662 and the Pipeline Rules on request by the AER. Any licensee who fails to do so will be in noncompliance with our requirements.

Does the purchaser need to review all required records before agreeing to the licence transfer on the AER's system?
The seller and purchaser must agree on the records to be transferred as part of the sales arrangement. This is likely to involve technical experts before the licence is transferred. The purchaser's pipeline expert must use professional judgement in determining that the pipeline can be operated safely based on the records.

Does the pipeline licence transfer process announced in Bulletin 2015-34: Confirmation of the Transfer of Pipeline Records to Be Added to the Licence Transfer Application apply to discontinued and abandoned pipelines?
Yes. The purchaser must review available records to confirm that the pipeline has been properly discontinued or abandoned. If records are insufficient, the two parties must decide how that will be addressed. An appropriate engineering assessment may be required and further work completed. The pipeline expert should use professional judgement to determine the scale of the assessment based on the risk associated with the pipeline.

Does the pipeline records transfer process announced in Bulletin 2015-34 apply to licensees that are bankrupt or otherwise unable to carry on with normal business?
Yes. Records transfer should be a matter of discussion between the seller and purchaser and part of the sales arrangement, even if the party responsible for a pipeline is a receiver. The purchaser still needs to evaluate the available records to determine if the pipeline can be operated safely. If records are missing and need to be re-established, the onus will fall on the purchaser to undertake an appropriate engineering assessment to re-establish any missing records and determine that the pipeline is fit for its intended purpose.

If after the licence transfer is completed, the purchaser finds that the pipeline records are not in accordance with CSA Z662 and the Pipeline Rules, what should be done?
If after the licence is transferred, the purchaser finds that the records do not meet what is required or are missing, it is the purchaser's responsibility as the current licensee to have the appropriate engineering assessment done to re-establish any missing records and demonstrate that the pipeline is fit for its intended use and safe to operate. The engineering assessment must be included in the purchaser's integrity management program so that the records are re-established in a timely manner.

What would the AER consider an appropriate engineering assessment?
The purchaser must use professional judgement to determine what constitutes an appropriate engineering assessment; the assessment must demonstrate that a pipeline is fit for its intended use and safe to operate. Assessments should be scaled according to the risk associated with the pipeline. Clauses 3 and 10 of CSA Z662 should be used as a reference on engineering assessments.

Does the AER have a list of what kinds of records should be transferred, including what it may consider an adequate substitute if those records are missing?
No. The details of what records a pipeline licensee must maintain are set out in CSA Z662 and the Pipeline Rules and are based on a number of factors, including the pipeline specifications and product transported. The purchaser reviewing the records should use professional judgement to determine if the records are adequate.

How will the AER choose a licence transfer application for compliance review?
We will choose an application to review at random or during a routine field inspection. We may also decide to review an application if a pipeline segment is considered high risk (e.g., there is a major water crossing). As we complete more reviews, licensee performance in complying with record transfers may become a factor in the selection process.

What are the consequences of noncompliance if the AER determines that the records are inadequate?
The licensee of record is responsible for complying with our requirements. Noncompliances are addressed under our Compliance Assurance Program. The consequences vary with the circumstances. If records are missing, the licensee, at a minimum, will be required to obtain or generate adequate records. This may include having to do a risk-based engineering assessment to show that the pipeline is fit for its intended use and safe to operate. We may also shut in a pipeline segment until we are satisfied that the records are adequate.