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As Saskatchewan’s oil and gas sector waits to hear what kind of help it will receive from Ottawa, the province is announcing some relief measures for the time being.
Energy and Resources Minister Bronwyn Eyre said Tuesday the sector is a major contributor to the province’s economy and employs, directly and indirectly, more than 34,000 people and generated more than $600 million in royalties and other taxes for the government in 2019.
The sector has been one of the hardest hit by the COVID-19 pandemic and other market influences.
The relief measures put in by the province include extending a series of filing and other deadlines to assist the sector in stabilizing operations as employees work from home, extending by one year mineral rights that were scheduled to expire in 2020, and reducing the industry portion of the Oil and Gas Administrative Levy by 50 per cent for the current fiscal year and delay the invoicing of the remaining balance until Oct. 1, 2020.
This cut in the administration levy will provide $11.4 million in relief for the sector.
“I think we have tried to be cautious to weigh what we can and do what we can preliminarily and continue to weigh every option and we continue to look at other options,” Eyre said during a conference call with media on Tuesday.
Eyre said the sector is still waiting for an announcement from Ottawa in regards to help from the federal level.
Eyre said she has been in contact with her Ottawa counterpart, Minister of Natural Resources Seamus O’Regan, including a call over Easter weekend.
“I’ve talked about the need to address (this issue) and to look at Saskatchewan as its own unique sector,” Eyre said. “We’re different in many ways from Alberta so it can’t be a one-size-fits-all approach to the energy sector.”
Eyre said she has brought up the issue of well abandonment in Saskatchewan.
“We have to be very aware of the nature of our particularly low-producing wells,” she said. “While low-producing, they can also be producing for a very long time. The hope would be that those would not be shut in.”
The province also reached a draft agreement with the federal government on the regulation of methane reductions in the upstream oil and gas industry. Eyre said the province will work with operators to find a way to reduce emissions from venting and flaring by 4.5 million tonnes per year by 2025.
A Memorandum of Agreement was also signed between the province and the Canadian Association of Oilwell Drilling Contractors. It’s designed to help reduce red tape and duplicated regulations for service rig operators.