B.C. oil and natural gas royalty transition

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

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

On January 1, 2027, the new royalty framework will take effect. Under the new framework, wells will have new royalty rates based on commodity price.

On this page

• Timeline of royalty transition
• Updates on the new royalty framework
• Provisions for oil and gas wells during transition period
• About the Royalty Review project

Timeline of royalty transition

2022 to 2027 royalty transition timeline

Date	Event
September 1, 2022	Beginning of transition period. Transition provisions apply to new gas wells
September 1, 2024	Additional transition provisions apply for new dry gas and oil wells
December 31, 2026	Last day the pre-transition royalty system applies and last day wells spud during the transition period can qualify for transition provisions
January 1, 2027	New royalty framework takes effect
March 23, 2027	First invoice run under new royalty framework

Updates on the new royalty framework

Here is what we've announced about the new royalty framework for oil and gas:

• New invoice specification file for production accounting systems

For more details, visit updates on the new royalty framework.

Provisions for oil and gas wells during the transition period

During the transition period from September 1, 2022, to December 31, 2026, your well may have different royalties, deductions and allowances, depending on its spud date. The spud date is the date the ground is broken for the new well.

Spud date before the transition period

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.

Spud date during the transition period

Gas wells with a spud date between September 1, 2022, to December 31, 2026, have a transition provision. Additional transition provisions apply to oil wells and dry gas wells with a spud date on or after September 1, 2024. The transition provisions apply until the applicable number of production hours are completed.

Learn more about how wells spud during the transition period are affected.

Spud date after the transition period

No transition provisions apply to wells spud on or after January 1, 2027, as they fall under the new royalty framework.

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.

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 and Climate Solutions. Learn more about the project and check out the What We Heard (PDF, 1.54MB) consultation report.