The Government of Saskatchewan has launched the Accelerated Site Closure Program (ASCP) to use $400 million in federal funding for the abandonment and reclamation of inactive oil and gas wells and facilities. The program is scheduled to run until February 28, 2023. The primary purpose of this program is to put Saskatchewan people and companies back to work in the oil and gas services sector.
The ASCP will be overseen by the Ministry of Energy and Resources and administered by the Saskatchewan Research Council (SRC). The program will maximize the use of Saskatchewan-based oil and gas service sector companies. Meaningful First Nations and Métis participation in the ASCP will be an important consideration over the life of the program.
It is estimated that the equivalent of up to 8,000 inactive wells and facilities will be abandoned and reclaimed over the life of this program. This funding is expected to support approximately 2,100 full-time equivalent jobs in the oil and gas service industry.
The ASCP will be rolled out in several phases. Phase 1, released in June 2020, allocated $100 million in funding to eligible oil and gas licensees to engage Saskatchewan's oil and gas service sector to carry out site closure work. The goal of Phase 1 was to move quickly to get Saskatchewan's oil and gas service sector back to work. In December of 2020, Phase 2 allocated an additional $200 million in ASCP funding to eligible licensees.
Eligible licensees will receive a funding allocation that is commensurate with their share of total inactive liability in Saskatchewan. Eligible licensees will use the Integrated Resource Information System (IRIS) to nominate inactive wells, facilities and flowlines into the program. Through this process, licensees will also be able to identify preferred service companies.
Using these nominations, the SRC will commence the formation of work packages. Licensees will engage qualifying service companies to carry out site closure activities contained in an SRC issued work package. The SRC will pay service companies directly. Details on the schedule of payments to service companies will be contained in the work package agreements. All contracting for services will take place exclusively between eligible licensees and qualifying service companies.
Phase 3 of the program will be developed with insights gained in Phase 1 and Phase 2 to ensure that site closure work is advanced in support of program objectives.
Important Program Updates
Indigenous Business Credit Pool Update
Per program guidelines, licensees receiving an allocation under the Indigenous Business Credit Pool (Credit Pool) were asked to earn more than 50% of their credits by February 28, 2022. Licensees were notified on April 21, 2022 indicating whether they met the threshold or not. Licensees that met the threshold received an additional allocation and licensees that did not meet the threshold had any remaining Credit Pool allocation rescinded.
Please note that $1.5 million in Credit Pool funding remains accessible by application. This will be accessible by all ASCP eligible licensees. The intent is to ensure that all Credit Pool funding is used to support the participation of Indigenous oil and gas service companies. Details on the design and application process, including the application form, have been sent directly to licensees via the Saskatchewan Research Council. You can also download the application form. You can view the updated Question and Answer document for additional details by following the Associated Documentation tab on the left navigation bar.
ASCP Stakeholder Concerns and Feedback
The ASCP has created a form for anyone to identify concerns or register complaints with the program. This form should be used to identify specific situations where it is believed that program rules are not being followed. This includes eligibility of service companies, practices of licensees, invoicing issues, or other matters. If desired, feedback can be provided anonymously.
Please see the feedback form that can be filled out.
Stalled Work Packages
To ensure the full spend of the program funding, the ASCP will identify work packages with no invoices submitted for six consecutive months. Licensees with those packages will be requested to submit a plan for execution of the work outlined in the package. Failure to provide a satisfactory plan within the specified timeframe will result in termination of the work package contract and recapture of any allocation(s) tied to the subject work package contract(s).