REGINA — The Province of Saskatchewan has announced new relief measures for the oil and gas sector in response to the economic damage brought on by the COVID-19 pandemic and a recent price war between Russia and Saudi Arabia.
The measures include extending a series of filing deadlines to assist the sector as employees transition to working from home, extending mineral rights that are scheduled to expire by 2020 for one year, and reducing the industry portion of the Oil and Gas Administrative Levy by 50 per cent this fiscal year along with delaying the invoicing of the remaining balance until Oct. 1, 2020.
“The Saskatchewan energy sector is the second largest contributor to provincial GDP and, directly or indirectly, employs more than 34,000 people, so doing all we can to protect jobs is a major priority. These relief measures will address certain immediate liquidity and administrative challenges to help companies focus on retaining as many workers, and as much production, as possible,” said Saskatchewan Energy and Resources Minister Bronwyn Eyre in a statement.
Saskatchewan has also reached a draft agreement with the Government of Canada on methane reduction regulation in the upstream oil and gas industry. The federal government will now start the process of confirming the agreement through the federal review process.
“We are very pleased that the federal government has agreed with the strength of our Methane Action Plan, and that we have regained provincial jurisdiction over our regulations. We will now work with our operators in a commonsense way to reduce emissions from venting and flaring by 4.5 million tonnes per year by 2025.,” Eyre said.
The Canadian Association of Petroleum Producers (CAPP) also voiced support for the relief measures.
“We acknowledge and are encouraged by the Government of Saskatchewan’s efforts to introduce these relief measures to the oil and natural gas industry as we deal with the unprecedented challenges associated with the COVID-19 pandemic and the global economic crisis. CAPP is also pleased the province and the Government of Canada have reached a draft methane equivalency agreement. Provinces are the best-placed regulator for their natural resource industries,” said CAPP western Canadian operations vice-president Brad Herald.
Saskatchewan has also signed a Memorandum of Agreement (MOA) with the Canadian Association of Oilwell Drilling Contractors (CAODC) that harmonizes regulations with Alberta regarding local service rig companies.
“The new transportation MOA reduces red tape for service rigs while ensuring the highest level of public safety in Saskatchewan. We thank the Saskatchewan Government for their leadership and helping get our people back to work,” CAODC president and CEO Mark Scholz said.
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