The province of Saskatchewan announced Tuesday a number of relief measures aimed at the province’s oil and gas sector.
That comes in the wake of the economic downturn due to the price war between Russia and Saudi Arabia as well as the COVID-19 pandemic.
Relief measures announced, according to the province's news release, include the following:
• extension of a series of filing and other deadlines to assist the sector in stabilizing operations, as their employees transition to working from home.
• extending mineral rights, scheduled to expire in 2020, by one year, including rights granted under the terms of an oil and gas lease, exploration license or permit.
• reducing the industry portion of the Oil and Gas Administrative Levy 50 per cent this fiscal year, and delaying invoicing of the remaining balance until Oct. 1, 2020. The province estimates this will provide relief of $11.4 million to address immediate liquidity challenges.
The province also announced it reached a draft agreement with the Government of Canada on the regulation of methane reductions in the upstream oil and gas industry. The agreement comes after months of discussion and will now go through the federal review process.
The province also stated in a news release they recently signed, along with the Canadian Association of Oilwell Drilling Contractors, a Memorandum of Agreement to harmonizes regulations with Alberta to support local service rig companies and employees, a move the province touts as reducing red tape.
These moves are coming, according to the government, in response to the pressures being faced by the industry in Saskatchewan.
“It’s very difficult to hear, again and again, the same phrases that companies are in job preservation mode, or survival mode, or that this is unprecedented, which we know it is,” Energy and Resources Minister Bronwyn Eyre said at a news conference Tuesday.
She noted the pressures faced by the sector including federal regulatory hurdles and “nothing short of an export ban”, as well as the recent capital investment cuts announced. “We have to preserve what we can and we can’t forget that the oil and gas sector is a job creating sector, a major driver of the provincial economy, the second largest contributor to GDP, it employs some 34,000 Saskatchewan people,” said Eyre.
