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    Alberta Extends Relief Package for Energy Industry


Federal aid package expected this week

by: Dale Lunan

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Alberta Extends Relief Package for Energy Industry

The government of Alberta extended a C$213mn (US$147mn) relief package to the province’s energy industry late on March 20, measures it said were a first step in enhancing the liquidity and longer-term certainty of an industry ravaged by the Covid-19 pandemic and the global crude price collapse.

“In order to keep Albertans employed, our government is taking immediate action to help our energy sector get through these difficult times,” energy minister Sonya Savage said. “By providing industry with more options, in the short-term they are able to maintain operations and protect jobs.”

The government is stepping in to fund the industry levy for the Alberta Energy Regulator for a period of six months, achieving C$113mn in industry relief.

Mineral agreements set to expire in 2020 have been extended by one year, providing increased certainty for industry by allowing more time to raise capital and plan future activities.

And a C$100mn government loan has been extended to the Orphan Well Association that will support the association’s immediate reclamation efforts, decommission about 1,000 inactive wells and start more than 1,000 environmental assessments. It is expected to create up to 500 direct and indirect jobs in the province’s service sector.

The Orphan Well Association is a collaboration between the Alberta government, provincial regulators and the oil and gas industry. It has a mandate to safely decommission inactive wells, pipelines and production facilities that have been abandoned – or orphaned – by companies that have gone out of business.

As of November 2019, the association had an inventory of more than 3,400 orphan wells and more than 3,500 orphan pipeline segments awaiting abandonment and nearly 2,800 orphan sites awaiting reclamation.

“These are incredibly challenging times for Albertans and for the energy sector,” Gary Mar, CEO of the Petroleum Services Association of Canada, said. “These steps will provide the province’s oil and gas producers with additional flexibility, increasing their ability to protect their workforce.”

The Canadian government is expected to announce its own wide-ranging program to support the oil and gas industry soon.