Oil and gas co-owners in Canada frequently chose to allocate liability contractually, in Joint Operating Agreements such as the 2007 CAPL Operating Procedure. This contractual allocation of liability coexists with the statutory allocation of liability. While these two liability schemes often work together sometimes there may be disparities between the contractual and statutory allocation of liability, especially in circumstances where one co-owner is insolvent.
This thesis focuses on the legal position of joint operators under the 2007 CAPL and on those parties who chose not to participate in an independent operation on the joint lands. This thesis concludes that – in certain circumstances – these parties may be liable for the full costs of environmental clean-up and restoration (i.e. beyond their proportionate working interest share). Whether a joint operator will be exposed to liability depends, in part, on the discretionary authority exercised by the Alberta Energy Regulator.