B.C. oil and natural gas royalty transition

The current B.C. oil and natural gas royalty framework is changing.

The existing royalty framework has been in place for more than 30 years. The way natural gas is produced has changed significantly over this time period, as have market conditions, drilling technology and costs, and global climate change concerns.

A new royalty framework will replace the existing royalty framework. To support this change, government introduced a transition period September 1, 2022 to August 31, 2024, which has now been extended until December 31, 2026.

As of January 1, 2027, the new royalty framework will take effect.

Regulation for the transition period

The regulation for the transition period under the Petroleum and Natural Gas Act was created on May 19, 2022 and updated on August 30, 2024. The regulation is now in effect.

A copy of the regulation, Order in Council No. 571 (PDF, 620KB) is available.

Impact of the transition period on oil and gas wells

Between September 1, 2022 and December 31, 2026, you may have different royalties, deductions and allowances for your well.

Most wells remain under the existing royalty framework

Existing oil and gas wells with a spud date before September 1, 2022 will remain under the existing royalty framework until December 31, 2026.

Learn more about how existing wells are affected.

New wells have a transitional provision

For any new gas well with a spud date on or after September 1, 2022, a transitional provision applies. Additional transitional provisions apply to oil wells and dry gas wells with a spud date on or after September 1, 2024. 

The spud date is the date the ground is broken for the new well. Learn more about how new wells are affected.

Keep informed

As more information about the transition to the new royalty framework becomes available over the next two years, we’ll update this page. To be notified by email when information is updated, sign up for our subscription service and select “Royalty transition 2022-2024” as your topic of interest.

As changes to how you report and pay royalties under the new framework are implemented, our oil and natural gas royalties and taxes website will be updated. To make sure you know about new reporting and payment instructions, we recommend you also select "Oil and natural gas royalties and taxes" as a topic of interest when you sign up for our subscription service.

About the Royalty Review project

Changes to the royalty framework are the result of the Natural Gas Royalty Review project led by the Ministry of Energy, Mines and Low Carbon Innovation. Learn more about the project and check out the What We Heard consultation report.