The Saskatchewan government has announced a plan to provide support to the province’s oil and gas sector through a series of relief measures.
The announcement comes as the price of oil Has taken a hit from the COVID-19 pandemic and the price war between Russia and Saudi Arabia.
In a release on Tuesday morning from the government, those measures will include:
• Extending a series of filing and other deadlines to assist the oil and gas sector in stabilizing operations, as their employees transition to working from home. These extensions do not impact health or environmental safety and apply to routine reporting activities, which will be addressed when the sector returns to normal operations.
• Extending mineral rights, scheduled to expire in 2020, by one year. This includes rights granted under the terms of an oil and gas lease, exploration license or permit. The extension will provide oil and gas disposition holders with the time necessary to properly evaluate their properties once the current situation stabilizes.
• Reducing the industry portion of the Oil and Gas Administrative levy by 50 per cent this fiscal year and delaying the invoicing of the remaining balance until October 1, 2020. This will provide the sector with relief of $11.4 million to address immediate liquidity challenges.
While some are wondering if this is enough to support the sector, Energy and Resources Minister Bronwyn Eyre believes the government has been cautious to do what they can at this time of uncertainty.
She told reporters other options for support would include the federal announcement that she expects will come down any day now.
“We are watching for that very carefully in terms of what we can do to work with that announcement and then finalize things from there,” said Eyre.
“We’ll be looking to harmonize where possible what we can around federal efforts and continue to monitor things that can be addressed in provincial jurisdiction as the weeks go forward.”
Eyre feels Tuesday’s aid package from the government is something they were able to offer as they explore other options in the meantime.
The minister is also considering similar support for other industries like potash or uranium.
“We continue to look at everything and I will bring forward proposals and recommendations in the next short while,” explained Eyre. “We recognize this isn’t only an oil and gas sector impact.”
The government says they have also reached a draft agreement with the federal government on the methane reduction regulation.
The agreement starts the process of suspending the application of federal regulations to Saskatchewan producers and will help reduce emissions from venting and flaring by 4.5 million tonnes per year by 2025.
Additional steps were also taken by the Saskatchewan government to reduce red tape and duplicate regulations for provincial service rig operators. This is the result of the government signing a memorandum of agreement (MOA) with the Canadian Association of Oilwell Drilling Contractors to “harmonize regulations with Alberta to support local service rig companies and their employees.”