RESTRICTIONS

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Contents

Introduction

The control and management of ongoing business functions within an organization necessitates the storage of vital information. Information is an asset; a data model is essential for managing this asset. The Restrictions Module is a database module designed to allow the capture of business objects as they pertain to restrictions. The data structure of the restrictions is broken down into sub-modules that cover:

  • Description
Description stores relevant information about restriction classifications, activities that are
restricted, the text of the land restriction documents as provided by regulatory agencies, general
remarks, valid contacts, and SPATIAL DESCRIPTIONS.
  • Land Right Restrictions
Land Right Restrictions stores cross-references to restrictions that apply to specific land rights and
narrative remarks as they are applied to land rights.
  • Land Sale Restrictions
Land Sale Restrictions stores cross-references to restrictions that apply to specific land sales and
narrative remarks as they are applied to land sales.

The Restrictions module in PPDM version 3.7 supports environmental functions related to the administration of surface activities such as seismic exploration, drilling operations and facility construction. In its present form, the module allows users to capture descriptions of surface activities that are subject to legal, regulatory or contractual restrictions. These restrictions may be associated with contracts, land rights or other activities as is relevant.


In its present form the Restrictions module handles mostly regulatory restrictions of an environmental nature, such as bird sanctuaries, migration routes and fisheries grounds. Future developments are expected to increase its scope to cover any type of surface activity restriction, including those imposed by landowners. Development of a Health, Safety and Environment module, planned for future releases of PPDM, will integrate this information with new modules to support environmental assessment, management and reclamation.

In summary, the various sub-modules address the pertinent data that is required to capture all the necessary requirements to provide for the administration of restrictions. The source of restrictions mainly comes from the Land Mineral Rights Module that will be using this part of the database for the storage of this information. Restrictions may also be negotiated and covered under the Contracts Module.

Purpose

The Restrictions Module provides the means for a Business Associate to track contractual, statutory, and documented restrictions or limitations on activities that are defined in the terms and conditions of legal agreements, or legislated terms and conditions that are applicable to the use of property. A Business Associate is required to comply with the terms and conditions of the restriction.

Business Processes

Nearly every aspect of the Exploration and Production business requires access to the ground; obtaining and managing rights to the surface is a key business process that spans the entire life cycle of every E&P business object. This is self evident in land-based work; every field operation must be arranged with appropriate permission to access the necessary surface land. Marine operations share many requirements to ensure that their operations comply with environmental or other restrictions.

Restrictions are the limitations placed upon the use of surface lands (or the marine environment). Restrictions may be imposed through negotiations, contractual arrangements, legislation or regulation; in a single business operation, and Oil and Gas companies may need to manage many types of restrictions.

Some restrictions dictate the methods and equipment that may be used. For example, during winter field operations, you may be required to use wide tracked vehicles over marshy terrain. Other restrictions may dictate the time of year that operations are (or are not) permitted. In northern climates, field operations are normally restricted during the spring thaw, when the land is soft and susceptible to damage. Failure to comply with restrictions may jeopardize the validity of the terms and conditions of an agreement and could result in litigation and/or penalties.

Restrictions may be imposed at many stages of the E&P life cycle. The following hypothetical life cycle illustrates a few of the many types that could be encountered:

Restrictionstable.JPG

Restrictions that will be applied to a land right acquired from a government are usually known when the land right is posted for bidding. While many restrictions may be documented in the body of the land sale document, others may be associated with the geographic area in which operations are planned, or are enforced through legislation. Others are established in conjunction with local or indigenous residents through consultation when operations are proposed. In most cases, many information sources should be consulted to ensure that all restrictions have been identified.

Recording pertinent information about restrictions allows applications to support administration of any reporting or functional requirements. Particularly pertinent is information about the type of restriction, specific activities that are prohibited or restricted, dates or seasons that the restriction is in effect, and details about how to contact the appropriate enforcement agencies.

Some restrictions are time sensitive. For example, from September 15th to October 15th of each year, no entry can be obtained in certain areas because the Trumpeter Swans are breeding. It is the Operator’s responsibility to ensure compliance with these restrictions. An agency such as a government body is responsible for the creation and enforcement of certain restrictions. Legislated or environmental restrictions are usually defined for a Geographic areaany land right that falls within the boundaries of a restricted area is subject to its provisions. Over time, regulators may modify the restrictions to some extent, so it is important to know which version of a restriction the land right is bound by. Often, a land right is subject to many different restrictions that are set by various agencies or regulatory bodies.

Administration of restricted areas is complex, both for the operators of the activity and for the responsible regulatory body. Specific details of a restriction often change over time, making it necessary for all parties to keep track of which version of a restriction each land right is bound by. Over time, as the lands covered by the land right change, it may be necessary to add or remove active associations with restrictions. However, since responsibility for reclamation activities can extend beyond the lifetime of actual operations in an area, it is usually necessary to maintain even outdated associations with restrictions.

Failure to comply with a restriction can have serious ramifications and may result in the loss of property access rights or severe financial penalties. If this occurs, a Business Associate may suffer loss of the initial investment and any operational costs that were paid. Additional costs may also be incurred if failure to comply with restrictions results in litigation by another Business Associate affected by the error.


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