Click a question below to view the answer. You may also want to view the frequently asked questions prepared by the AER.

What must operator do to comply with EPAP?

At a minimum an operator must:

  1. Evaluate sufficient control so the operator can declare its state of compliance with a reasonable level of assurance.
  2. Investigate items listed on the monthly CAI Report that the Regulator produces for every operator.
  3. Submit an annual EPAP Declaration to the Regulator.
  4. Remediate control concluded as not effective during the evaluation of control.

Read more detail about EPAP impacts on operator.

To invite a Corvelle consultant to your office to describe these operator tasks in more detail, please contact us.

Can an operator achieve benefits beyond compliance from EPAP implementation?

An EPAP implementation project often achieves benefits in the following areas:

  1. Reduction in operating costs
  2. Improved accuracy of measurement
  3. Lower risk of royalty overpayments
  4. Higher assurance over AER compliance
  5. Enhanced operator reputation

The value of these benefits will vary from operator to operator. The value will be influenced by:

  1. State of business processes and control prior to the EPAP implementation
  2. Complexity of facilities owned by operator
  3. Operator production volume

To invite a Corvelle consultant to your office to describe these benefits and how to estimate them, please contact us.

What's a control?

A controls is designed and operated to ensure that a business-process being conducted reasonably.

See question below for a graphical view of the relationship among business processes, controls and evaluations of controls.

To invite a Corvelle consultant to your office to describe controls and related concepts in more detail, please contact us.

Relationship of business processes, controls and evaluations of controls.

The relationship among business processes, controls and evaluations of controls is best depicted as follows:

EPAP_relationships

At the bottom of this diagram is the Business Process. A good example of a business process is the collection of gas charts and meter readings.

Above the Business Process is the Control. A good example of a control is the logging all the gas charts and meter readings to ensure all the expected data has been gathered for a given production period.

Above Control comes the Evaluation of the Control. A good example of an evaluation of controls is to examine the log of gas charts and meter readings for a given production period.

To invite a Corvelle consultant to your office to describe these relationships and how to keep them distinct, please contact us.

What does EPAP replace?

EPAP replaces the substantive audit program and introduces a new controls-based audit methodology for assuring compliance with Regulator measurement and reporting requirements.

To invite a Corvelle consultant to your office to describe the advantages of the controls-based audit methodology over the substantive audit methodology, please contact us.

Where are Regulator measurement and reporting requirements described?

AER measurement and reporting requirements are described in the following relevant directives:

  • Directive 017: Measurement Requirements for Upstream Oil and Gas Operations
  • Directive 007: Volumetric and Infrastructure Requirement
  • Manual 011: How to Submit Volumetric Data to the AER
  • Directive 046: Production Audit Handbook
  • Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting
  • Directive 042: Measurement, Accounting, and Reporting Plan (MARP) Requirement for Thermal Bitumen Schemes

To invite a Corvelle consultant to your office to summarize AER measurement and reporting requirements, please contact us.

 

ECON measurement and reporting requirements are described in the following directive:

  • Directive PNG017: Measurement Requirements for Upstream Oil and Gas Operations
  • Directive R01: Volumetric, Valuation and Infrastructure Reporting (Petrinex)

To invite a Corvelle consultant to your office to summarize ECON measurement and reporting requirements, please contact us.

What happens when we operate a facility and others operate the related wells?

The operator of the facility is advised to receive reasonable assurance from the operators of the wells that they are operating in reasonable compliance with Regulator measurement and reporting requirements.

This assurance can be achieved through a number of actions including:

  1. Conducting an evaluation of controls for the wells.
  2. Reviewing the records of the well.
  3. Witnessing key operational work such as well tests and calibrations.

The benefits for the operator of a facility to achieve this assurance include:

  1. Higher assurance over the state of compliance at the wells.
  2. Higher assurance over the accuracy and completeness of fluid volumes produced by the wells.
  3. Lower risk of accepting the entire measurement uncertainty for the receipt volumes.

Where the two operators cannot achieve a consensus on what constitutes reasonable assurance or compliance, the following less desirable actions can be undertaken. The operators of the wells can:

  1. Apply to license one or more new batteries that they will operate.
  2. Choose to physically connect or transport fluid volumes produced to other facilities.
  3. Choose to turn over operatorship of the wells to the operator of the receiving facility.

To invite a Corvelle consultant to your office to describe alternative approaches to achieving reasonable assurance from the operators of the wells, please contact us.

Who can see our EPAP Declaration and other documents?

AER

Under the terms of the Alberta Freedom of Information and Protection of Privacy (FOIP) Act, anyone can request documents from the AER. The AER will typically fulfill requests for documents, including EPAP-related documents, because there is no basis under FOIP for denying the request.

The AER does not:

  1. routinely publish any EPAP-related documents on its website.
  2. notify operators of the requests it has received.
  3. ask for operator permission to release documents.

Since FOIP applies only to public bodies, EPAP-related documents created by operators, such as evaluation of controls conclusions, are private documents that are not subject to FOIP.

For more information, visit the FOIP website at Service Alberta.

To invite a Corvelle consultant to your office to describe the implications of FOIP in more detail, please contact us.

 

ECON

Under the terms of the Saskatchewan Freedom of Information and Protection of Privacy (FOIP) Act, anyone can request documents from ECON. ECON will typically fulfill requests for documents, including EPAP-related documents, because there is no basis under FOIP for denying the request.

ECON does not:

  1. routinely publish any EPAP-related documents on its website.
  2. notify operators of the requests it has received.
  3. ask for operator permission to release documents.

Since FOIP applies only to public bodies, EPAP-related documents created by operators, such as evaluation of controls conclusions, are private documents that are not subject to FOIP.

For more information, visit the website of the Saskatchewan Information and Privacy Commissioner.

How can we contain the cost of operating EPAP?

These are the considerations that will influence the cost of your EPAP implementation the most:

  1. Evaluate all controls at only a small sample of your properties – keep the number of properties low to include just enough related facilities.
  2. Investigate only higher weighted items listed on your monthly CAI Report – don’t try to investigate all your CAI items in one year.
  3. Submit a comprehensive, annual EPAP Declaration to the Regulator within the required period that is 30 to 60 days after the end of your declaration month – don’t draw attention to yourself by submitting late.
  4. Remediate higher value controls concluded as deficient during the evaluation of controls – don’t try to remediate all your deficiencies in one year.
  5. Just evaluate your controls – don’t evaluate the adequacy of your business processes.
  6. Just evaluate your controls – don’t conduct a substantive audit.
  7. Manage and cost business process improvement projects separately – these costs are not part of your EPAP implementation cost.

To invite a Corvelle consultant to your office to describe how to contain the cost of operating EPAP, please contact us.

Business process audits vs. Evaluations of controls

In a business process audit, the auditor will frame the discussion this way:

Please describe to me how your team performs meter calibrations.

This opening statement will start a fairly long discussion that may provide lots of value about how well the business process is being conducted.  However, this type of audit is expensive to conduct and its findings are well beyond the scope that EPAP requires.

Sometimes business process audits are conducted for EPAP for one of these reasons:

  1. The mistaken belief such an audit is required
  2. The auditor is only familiar with this form of audit.
  3. The signing executive insists on a business process audit.

In an evaluations of controls, the evaluator will frame the discussion this way:

Please describe to me how you assure yourself, as the control performer, that meter calibrations are being performed consistently and in a compliant manner.

This opening statement will typically produce a short answer that the evaluator can easily conclude as acceptable or deficient.  A series of these exchanges fulfill the scope that EPAP requires. Such evaluations can be conducted quickly and economically.

Having evaluators focus on evaluations of controls will:

  1. Contain the cost of EPAP operations.
  2. Focus the work on what’s most valuable to produce a reasonable level of assurance.
  3. Maintain EPAP compliance.

To invite a Corvelle consultant to your office to describe how to contain the cost of your EPAP implementation, please contact us.