Report information on oil and natural gas production
Last updated on August 23, 2024Royalty taxpayers and facility operators report information about oil and natural gas production throughout the well and facility life cycle. This information is used to calculate the amount of royalties or taxes due.
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Who reports oil and natural gas information
The following groups are responsible for reporting oil and natural gas information:
- Producers who are royalty taxpayers
- Operators of reporting facilities
- First purchasers of oil or condensate
Producers who are royalty taxpayers
A royalty taxpayer is a producer of oil or natural gas who takes ownership of oil or natural gas production. These producers are the direct recipients of proceeds from the first sale of the oil or natural gas and are responsible for paying royalties on oil or natural gas production.
Producers report pricing and cost of service information to the Ministry of Energy, Mines and Low Carbon Innovation and information about infrastructure, wells, pipelines and facilities to the British Columbia Energy Regulator (BCER). They also report valuation information for natural gas liquids and sulphur to the Ministry of Finance.
Operators of a reporting facility
An operator of a reporting facility is the operator on record with the BCER. Operators are responsible for infrastructure reporting and volumetric and allocation data, if applicable.
First purchasers of oil or condensate (purchasers)
The first purchaser of oil or condensate (referred to as the purchaser) is a person who purchases oil or condensate produced in B.C. The purchaser is responsible for valuation reporting.
Where and what to report
Industry participants report information to the Ministry of Finance and the Ministry of Energy, Mines and Low Carbon Innovation through:
Petrinex
Depending on your role and the product, information is reported either monthly or annually through Petrinex.
Note: If you make reporting errors in Petrinex, the system will produce error messages and generate potential penalties.
Volumetric reporting
Reporting facility operators must report balanced volumetrics for all products at facilities they operate. This information includes inventories, production, receipts, dispositions, and use and storage in that production month for oil, natural gas, natural gas by-products, and water at the facility.
Allocation reporting for marketable gas and natural gas by-products
Reporting facility operators must submit allocation information for all volumetrics that are identified as “allocations triggers”. The reporting facility operator accounts for these volumes by allocating them to:
- A royalty/taxpayer of a well event or unitized operation (stream ID’s), or
- The upstream delivering facility (if the royalty/taxpayer and well information is not known)
Oil and condensate pipeline split and valuation reporting
The volume of oil and condensate sold is assigned to royalty taxpayers and purchasers through the pipeline split process at a custody transfer point in Petrinex. A custody transfer point may include a terminal, pipeline, gas plant, waste plant, or any facility that is outside of B.C.
Royalty taxpayers and purchasers must then report valuation information for their share of these volumes.
When oil is recovered or being inventoried, reporting requirements depend on specific circumstances:
Oil recovered from a custody transfer point and allocated to a royalty taxpayer
Oil that is recovered at a custody transfer point and allocated back to the royalty taxpayer that produced the oil must be reported in Petrinex as production from the producing well.
An oil split and oil valuation must also be reported in Petrinex. The valuation must be based on the actual consideration received for the sale of the oil minus allowable transportation costs. This would result in the net sales value.
Note: Processing and treating fees at the treating facility are not allowable transportation costs.
Oil recovered from waste plants and not allocated to a royalty taxpayer
Oil that is recovered at a waste plant and not allocated to the royalty taxpayer that produced the oil is reported in Petrinex as production from the producing well. However, this oil does not incur an oil royalty under the Royalty Regulations.
This is because the waste plant operator takes ownership of the oil under the treating contract.
The royalty taxpayer is still required to report an oil split and oil valuation to Petrinex. They should enter the contract number as “WO” and the price as zero.
Oil inventoried at a custody transfer point
The volumetric disposition of oil to a custody transfer point requires an oil pipeline split in Petrinex for the entire oil delivery, with the assumption that all the oil delivered has been sold in the current month.
The price used for the volume sold is applied to the full volume.
Once the inventoried oil volume is sold in a subsequent month, the royalty taxpayer needs to amend the valuation using the weighted average of the original price and the new month’s price for the entire volume.
The royalty taxpayer and purchaser will need to communicate with each other to ensure the oil valuation is in balance.
Oil inventoried at a non-custody transfer point
Oil delivered and inventoried at a custom treater facility or other non-custody transfer point does not require an oil pipeline split.
Inventoried volumes at the custom treater facility that get delivered to a custody transfer point in the following month will require an oil split and valuation at that time.
Natural gas liquids (NGL) and sulphur valuation
Royalty taxpayers must report valuation information on NGL and sulphur product allocated to them from gas plants or gathering systems.
Allowable costs reporting
Qualifying royalty taxpayers provide information to establish allowable costs for the year, including producer cost of service (PCOS) and gas cost allowance (GCA).
Natural Gas Pricing System Portal
Royalty taxpayers report pricing and cost of service information to the Ministry of Energy, Mines and Low Carbon Innovation monthly through the Natural Gas Pricing System (NGPS) Portal. Access tutorials to learn how to use the NGPS portal.
BC Energy Regulator Online Systems
Throughout the regulatory life cycle – application, operational compliance and decommissioning – royalty taxpayers and facility operators report information on their infrastructure, wells, pipelines, and facilities. You report this information through the British Columbia Energy Regulator (BCER) generally during start up processes.
When to report
Some information is reported monthly and other information is reported annually. Monthly and annual reporting deadlines for Petrinex and the Natural Gas System Portal are listed in the Petrinex reporting calendars.
In some circumstances you must coordinate the timing of submissions with other parties to ensure you meet your reporting deadlines.
For example: Facility operators must volumetrically balance their facilities each month. An upstream facility cannot be fully balanced until the downstream operator has reported its receipts. Since it is each facility operator’s responsibility to be balanced, you are encouraged to contact the downstream operator if the deadline approaches and that information has not been reported.
Learn more about your reporting deadlines and important dates in the month.
Note: If you failed to report required information that was due before October 2018, you must report the information using these amendment forms.
Contact information
Find out who to contact for your questions about oil and natural gas in B.C.