$34 Million Approved to Support The Oil and Gas Service Sector
More Than $4 Million In Work Projects Already Completed
Today, the Government of Saskatchewan is providing an update on the Accelerated Site Closure Program (ASCP). Launched in May, with the first approved projects announced in July, $34 million worth of work packages have been approved.
“Saskatchewan-based service companies were among the hardest-hit sectors by COVID-19 and the OPEC+ price war, and it was crucial to get those workers—who form the backbone of the oil and gas sector—back on the job,” Energy and Resources Minister Bronwyn Eyre said. “We are proud of the ASCP program, which has rolled out smoothly and efficiently, and very pleased that workers across the province are being employed by local oilfield service companies.”
The current approved work packages make up Phase 1 of the program, which will allocate $100 million in funding for eligible oil and gas operators who collaborate with Saskatchewan-based service companies to undertake abandonment and reclamation work on inactive wells, facilities and flowlines.
The Saskatchewan Resource Council (SRC), with SaskBuilds, is providing procurement expertise to ensure that Saskatchewan-based service companies are employed. The ASCP continues to approve new work projects and, over a two-and-a-half year period, will access up to $400 million in federal funding. Up to 8,000 inactive wells and facilities are expected to be abandoned and reclaimed over the life of the program, which is expected to support some 2,100 full-time equivalent jobs.
“The Saskatchewan ASCP funding has made the difference from having six people employed to now having 25 people employed to undertake this work, which has tripled our company’s manhours since the funding came into place,” Prairie Dog Reclamation and Fencing owner and operator Jeff Loehndorf said. “I am so appreciative of the work this funding has generated in this province as it will go a long way to sustaining my business.”
There are currently 11 operators and over 100 service companies involved in the approved work packages, which are evenly distributed across all four major oil-producing regions of the province. Approximately $4.4 million in work has been completed to date, including 172 well abandonments, 312 well reclamations, 41 facility decommissions, and 38 flowline abandonments.
“Onion Lake Cree Nation Well Servicing GP is much appreciative for being called upon on the abandonment well program with CNRL,” Onion Lake Business Development Corporation Executive Director Tom Chief said. “Getting back to work has been a blessing in disguise as we didn’t have a clue where the oil and gas industry was heading with the uncertainty of the market, and we’re very hopeful this work continues and keeps us busy for the next couple of years.”
In addition to cleaning up inactive wells through the ASCP, the provincial government remains committed to working with the oil and gas sector to strengthen liability management programs, including policies and regulations, to ensure that licensees are responsible for environmental liabilities and inactive wells are properly reclaimed. This builds on work already completed last year, by the Ministry of Energy and Resources, on the development of a new abandonment directive that led to a record number of abandonments in 2019.
“Our strong, internationally-recognized regulatory framework will continue to serve us well by protecting the environment and supporting jobs and economic recovery,” Eyre said. “Saskatchewan’s oil and gas sector is one of the most environmentally responsible in the world, and our operators recognize the importance of the timely retirement of wells and facilities that are no longer economical.”