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Do leased buildings and equipment need to be included in abandonment cost estimates?

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Do leased buildings and equipment need to be included in abandonment cost estimates?

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Yes, the costs for abandonment of leased buildings and equipment must be included in the liability estimate submitted for the purpose of the ERCB’s Liability Management Programs. There is a legislative obligation to abandon all buildings, equipment, and appurtenances, etc. subject to an ERCB approval or license. That obligation makes no reference to ownership and the ERCB holds the licensee or approval holder and working interest participants fully responsible for the liabilities on sites approved by the ERCB. Leased buildings (including those which existed prior to the approval) or leased equipment that must be returned are governed by contractual arrangements between lessor and lessee and the ERCB is not privy to these contracts. Therefore, the abandonment cost estimate submitted to the ERCB must include all equipment or buildings associated with that facility licence.

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