Page 57 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 53-79

Outstanding Reclamation Deposit (ORD)

The requirement for ORD is solely due to any risks that potentially defer the reclamation.

The Approval Holder pays additional financial security to reduce its liability to meet

reclamation.

1.3. Approval Holder’s responsibility, MFSP Assets and MFSP Liabilities

Approval Holder’s responsibility when the ownership is less than 100%

Under the MFSP Guide the EPEA Approval Holder is always responsible for the 100% of

the MFSP assets and liabilities. In case of joint ventures, variable interest entities or participants,

companies may choose to provide their own share of the required financial security. It is because

the Approval Holder in reality may or may not have a 100% ownership of the mining facility.

However, as it is stated in the MFSP Guide 2011 of Alberta Environment, sharing the financial

security payable is a business arrangement but not the requirement of the MFSP. Thus, an

Approval Holder is always responsible to arrange timely estimation, measurement and provision

of financial securities to the fund.

As of 2011 Syncrude Canada Ltd has a total MFSP security of $ 205,303,024 (This

information is based on the Ministry of Environment 2011 Canada and on OSRIN paper by R.

Dixon, M. Maier, A. Sandilya and T. Schneider: “Qualifying Environmental Trusts as Financial

Security for Oil Sands Reclamation Liabilities). This was a sum of security amounts provided as joint

venture contributions. The partners of Syncrude Canada Ltd are Imperial Oil Limited, Suncor Energy

Inc., Canadian Oil Sands Ltd., Nexen Oil Sands, Alberta Ltd., Murphy Oil Company Ltd., and Mocal

Energy Ltd.

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