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Oilsands Lawsuit 003

Oilsands Lawsuit 003

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Published by Charles Rusnell

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Published by: Charles Rusnell on May 03, 2012
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COURT
FILE
NUMBERCOURT
JUDICIAL
CENTRE
PLAINTIFF(S)
DEFENDANT(S)
DOCUMENT
203
06534
COURT
OF
QUEEN'S
BENCH
OF
ALBERTAEDMONTON
HER
MAJESTY
THE
QUEEN
IN
RIGHT
OF
ALBERTA
CANADIAN OIL
SANDS PARTNERSHIP
#1,
IMPERIAL OIL
RESOURCES,
NEXEN
OIL
SANDS PARTNERSHIP,
MOCAL
ENERGY
LIMITED,
MURPHY
OIL
COMPANY
LTD.,
SUNCOR
ENERGY
OIL
&
GAS
PARTNERSHIP,
SINOPEC
OIL
SANDS
PARTNERSHIP,
and
SYNCRUDE
CANADALTD.
STATEMENT
OF
CLAIM
Form
10
[Rule
3.25]ADDRESS
FOR
SERVICE
AND
CONTACT INFORMATION
OF
PARTY
FILING
THISDOCUMENTJUSTICE
and
ATTORNEY GENERAL
Legal
Services Division
9
th
Fir,
10011-109
Street
Edmonton,
Alberta
T5J 3S8
Doreen
MuellerPhone:
(780)644-5780
Fax:
(403)427-1230
NOTICE
TO
DEFENDANT(S)
You are
being sued.
You are a
defendant.
Go
to the end of
this document
to see
what
you can do and
when
you
must
do it.
Note: State below
only
facts
and not
evidence (Rule 13.6)
1.
The
Plaintiff
is her
Majesty
the
Queen
in
right
of
Alberta
and at
all
material times
was
represented
by the
Minister
of
Energy.
 
2.
The
Defendants, Canadian
Oil
Sands Partnership
#1,
Imperial
Oil
Resources, Nexen
Oil
Sands Partnership, Suncor Energy Oil and Gas
Partnership,
and Sinopec Oil Sands
Partnership
are
partnerships under
the
laws
of
Alberta.
3.
The Defendant,
Mocal
Energy
Limited.,
is a body corporate incorporated under the
laws
of
Alberta.
4. The Defendant,
Murphy
Oil
Company
Ltd.,
is a
body corporate incorporated under
the
laws
ofCanada.
5.
Collectively,
the
Defendants
referred
to in
paragraphs
2
through
4
inclusive
in
this
statement
of
claim
are
participants (the
"Defendant
Participants")
in a
joint venture developing
oil
sands leases near Fort McMurray, Alberta known as the Syncrude Royalty Project. TheSyncrude Royalty Project is also known in the records of the Plaintiff as Project Approval Order
No.
OSR045.
6.
The
Defendant,
Syncrude Canada Ltd., is a body corporate under the
laws
of Albertaand is the operator of the Syncrude Royalty Project.
Statement
of facts relied on:
7.
The Syncrude Royalty Project was established pursuant to a February 4, 1975 AibertaCrown Agreement, made under the authority of section 9
of
the
Mines and Minerals Act,
R.S.A.2000, c.
M-17.
This agreement is amended by: (a) the January 1, 1983 Amendment totheAlberta Crown Agreement; (b) the January
1,
1986 Amendment to the Alberta CrownAgreement; (c) the 1987 Amendment to the Alberta Crown Agreement; (d) the
August
15,1991
Amendment
to
the Alberta Crown Agreement; (e) the November
29, 1995
Amendment
tothe
Alberta Crown Agreement; (f) the
January
1, 1997 Amendment to theAlbertaCrownAgreement (Amendment No. 6: Transition Terms and Post Transition Terms); (g) the January
1,
2001 Amendment to the Alberta Crown Agreement (Amendment No. 7: Purchase of
Utilities);
(h)
the November
18,
2008 Syncrude Bitumen Royalty Option Agreement (the "BRO"); and (i)theNovember18,2008 Syncrude
Royalty
Amending Agreement (the
"RAA"),
(collectively,
the"Crown Agreement").
8. In
relation
to the
Syncrude Royalty
Project, all
or
some
of the
Defendants hold
a
number
of
oil sands
.leases
with the
Plaintiff
which are included in the description of the SyncrudeRoyalty Project.
In
those
leases,
the Plaintiff has reserved a royalty on oil sands productsrecovered from
the
Syncrude Royalty Project.
9. In
addition
to the oil
sands
leases
referred
to in
paragraph
8
above,
the
SyncrudeRoyalty
Project
and the
Defendants' requirement
to pay
royalty
are
governed
by the
CrownAgreement and legislation, including but not
limited
to the
Mines and Minerals Act,
R.S.A.
2000,
c.
M-17,
the 0/7
Sands Royalty
Regulation,
1997
(AR
185/1997)
(the "OSRR97"),
and the
Oil •
Sands Royalty Regulation, 2009
(AR 223/2008) (the
"OSRR09").
The Plaintiff pleads and relieson
the
provisions
of
this
legislation.
 
10.ThroughtheBRO,theDefendant Participants exercisedanoption, effectiveas of
January
1,
2009,
to payroyaltyonbitumen volumesasopposedtopaying royaltyon
upgraded
oil sands products. TheRAArecognized and confirmed this election to pay bitumen royalty.
11.
The
realization
of
this bitumen royalty option required
a
change
in the
location
of the
SyncrudeRoyaltyProject'sroyaltycalculationpoint,whichwasmoved fromtheoutletof theSyncrude upgrader (the "Previous RCP") to the outlet of certain diluent recovery
units
at thefront end of the Syncrude upgrader (the "New RCP").12. In addition, effective January 1, 2009, the Plaintiff enacted a new oil sands royaltyregulation,
the
OSRR09,
which
further changed
the
requirement
to pay
royalty.
Prior
to
January
1,2009, payment of
royalty
for an oil sands product in relation to a post-payout Period wascalculated based on the volumes of the
Plaintiffs
royalty share disposed of, consumed or used
within
that
post-payout Period.
With
the
enactment
of the
OSRR09,
payment
of
royalty
for an oil
sands product in relation to a post-payout Period is based on the volumes of the
Plaintiff's
royalty share that passed a royalty calculation point
within
that post-payout
Period,
and
which
were deemedbythat regulationto bedisposed.
13.
The change in thelocationof the royalty calculation
point
for
the Syncrude RoyaltyProject gave
rise
to certain volumes of oil sands products which had never crossed the PreviousRCP,andwhichwouldnever crossthe New RCP
("Transitional
Inventory"). Also, sincepayment of royalty was no longer triggered by the actual disposition
of
the Plaintiff's royalty
share,
certain volumesof oilsands productshadcrossedthePreviousRCPpriortoJanuary
1,
2009,
but had not
been disposed
of,consumed,or
used prior
to
this date ("CustomaryInventory").14. The Plaintiff amended the OSRR97 by
including
section 38.2 to address payment ofproceeds
for
the
Plaintiffs
royalty share of the Transitional Inventory and Customary Inventoryin relation to the Syncrude Royalty Project. Payment of the royalty proceeds
for
the royaltyshareof the
Transitional
Inventory
andCustomary Inventoryinrelationto theSyncrude RoyaltyProject accordingtosection 38.2was due on
April
30,2010.
15.
All
or
some
of
the Defendants are obligated to pay proceeds
for
the
Plaintiffs
royaltyshare of Transitional Inventory and Customary Inventory in relation to the Syncrude RoyaltyProject pursuant to the provisions of the terms of the oil sands
leases
held by the Defendants;
the
terms
of the
Crown Agreement;
the
Mines
and
Minerals Act,
R.SA 2000,
c.
M-17;
and the
OSRR97 and the OSRR09 as amended.
16.
The Defendants have
failed
to pay such proceeds in breach of the
[eases,
the CrownAgreement and
legislation,
and the Plaintiff is entitled to judgment for payment of such unpaid
royalty
including interest. The Defendants are justly and truly indebted to the Plaintiff for theunpaid royalty proceeds in the approximate amount of
$100,000,000
or such other amount aswill
be
proved
at
trial.
17.
Despite demands, the Defendants have refused to pay the unpaid royalty proceeds or
any
part thereofand thesame remainsajust debt improperly withheld.

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