Accelerated Site Closure Program

The primary goal of the program is to support Saskatchewan-based service sector workers and companies. It is expected that 2,100 jobs will be supported by this initiative and that up to 8,000 wells and facilities will be abandoned. Abandonment and reclamation work approved under Phase 1 will be funded at 100% of the eligible costs, paid directly to eligible service companies.

As program administrator, the SRC will create opportunities to achieve additional program benefits. Using a procurement-based model to allocate work will allow for the implementation of area-based closure through the bundling of work into packages for procurement. This will drive program efficiencies, generate more abandonment and reclamation work under the program, and keep more Saskatchewan people employed.

This model will also allow for the implementation of a supplier development function over the life of the program to maximize the development and use of Saskatchewan-based companies. Meaningful Indigenous participation in the ASCP will be an important consideration over the life of the program.

Under this model, all contracting for services will remain between the eligible licensee and the eligible service company. Under no circumstances will a third-party take control of a licensee's well or facility site. All affected licensees will be required to sign-off on work packages created by the SRC before they are put to tender.

To this end, up to $400 million will be made available through a number of funding phases.

• Phase 1 – up to $100 million; and
• Future phases – up to $300 million. Funding tranche amounts and timing for future phases commensurate with service sector capacity.

Phase 1 Funding Allocation and Eligibility

Determination of Eligible Licensee Funding Allocation

Eligible licensees will receive a funding allocation established by considering the eligible licensee's total deemed inactive infrastructure liability as a percentage of the total deemed inactive infrastructure liability of all eligible licensees. This ratio will be applied to the $100 million Phase 1 funding tranche to arrive at a licensee's eligible funding allocation.

Each eligible licensee will receive a minimum funding allocation of $50,000 to support reclamation and abandonment activities.

Licensee Eligibility Criteria

View the current list of eligible licensees and their funding allocation for Phase 1 of the ASCP. Note, this list may be subject to change and will be updated on a regular basis.

In Phase 1 of the ASCP, eligible licensees are licensees who were in good standing in relation to debts owing to the Crown as of March 1, 2020. For the purposes of eligibility under ASCP, Crown debts include:

• Amounts owing for the Oil and Gas Administrative Levy;
• Amounts owing for the Orphan Well Levy;
• Amounts owing for Crown oil and gas royalties;
• Amounts owing for Crown mineral disposition rentals; and
• Amounts owing for Crown surface lease rentals.

The Ministry of Energy and Resources will determine licensee eligibility and funding allocations. Eligible licensees were notified of their funding allocation via their IRIS service administrator email address on June 1, 2020.

Well and Facility Site Eligibility

Any wells, facilities and flowlines nominated into the program (see: How to Apply) must meet the following eligibility criteria:

• The well, facility, or flowlines located in a municipality in which the eligible licensee owes municipal taxes will not be eligible; and
• If located on private lands, the licensee must be current on surface lease payments to the landowner with respect to the specific well, facility or flowlines.

When nominating wells, facilities and flowlines into the program, the eligible licensee will be required to submit two declarations:

• A declaration stating that the licensee does not have any outstanding municipal taxes owing with respect to the nominated wells, facilities and flowlines; and
• A declaration stating that the licensee is current on surface lease payments to private landowners with respect to the nominated wells, facilities and flowlines.

Submitting a false declaration may result in collection actions by the Crown and could render a licensee ineligible for future funding under the ASCP.

Eligible Activities

Eligible activities for Phase I will include:

• Abandonment of oil and gas wells, facilities and associated flowlines;
• Environmental site assessments (Phase 1 and Phase 2);
• Site remediation activities; and
• Site reclamation activities.

In Phase I, preference will be given to abandonment and reclamation activities that can be approved routinely to support the rapid roll-out of funding to the service sector. However, deploying an area-based closure model is still a priority under this program and exceptions will be considered.

Any work that commenced or was completed prior to the program launch date and/or has not been included in a work package issued by the SRC will not be eligible under the program. However, if the abandonment was completed prior to that date, the remaining remediation and reclamation work would be eligible under the program. The same principle will apply to the stages of remediation and reclamation for well and facility sites.

Eligible Service Companies

The current list of ASCP approved service companies can be found here. Note, this list is subject to change throughout the life of the program and will be updated at regular intervals.

Service companies eligible under the program will be able to conduct well and facility abandonments, flowline abandonments, Phase 1 and Phase 2 environmental site assessments, remediation and reclamation.

Service companies that wish to participate in Phase I of the program must be Saskatchewan-based. This includes:

• Being located in Saskatchewan;
• Employing Saskatchewan people;
• Paying Saskatchewan taxes; and
• Sourcing their supplies from Saskatchewan-based businesses based upon capacity, quality and availability.

Service companies must also meet a number of technical requirements to be eligible for the program. This includes:

• Employ and keep current all safety programs or safety management systems;
• Maintain a minimum of $2,000,000 Comprehensive General Liability Insurance;
• Maintain a minimum of $1,000,000 Automotive Liability Insurance;
• Be registered with the Workers Compensation Board (WCB); and
• Where applicable, hold a valid Saskatchewan or home province Certificate of Recognition (COR) or Small Employer Certificate of Recognition (SECOR).

The ASCP will include a pre-qualifying process for service companies. This will ensure that eligible service companies are Saskatchewan-based and are capable of safely and effectively completing work under the program.

Eligible Expenses

All expenses associated with completing the work, and in accordance with the procurement contract, will be eligible, including:

• Materials and supplies;
• Wages;
• Equipment rentals;
• Laboratory analysis; and
• Transportation of workers and equipment to and from sites.

Additional details on eligible and ineligible expenses will be made available as part of the procurement process set out by the SRC.

Phase 2 Funding Allocation and Eligibility

Phase 2 of the ASCP will see an additional $200M allocated to licensees. In determining Phase 2 allocations for licensees, the program will utilize the same eligibility criteria and the same allocation formula that was used in Phase 1 (see above).

Similarly, Phase 2 allocations will be subject to the same eligible activities and expenses requirements as Phase 1. The process to nominate infrastructure will remain the same. The list of eligible service companies for the program will carry over into Phase 2 and be updated on an ongoing basis. Licensees will be notified of their Phase 2 allocations via IRIS the week of December 14, 2020, and the allocations will be posted here on the website at that time.

Licensee eligibility requirements remains the same as in Phase 1 in regards to amount owing to the Crown. However, owing to a later than usual issuance of invoices related to the 2020-21 Orphan Fund and the 2020-21 Administrative Levy (resulting from industry relief measures), licensees will have until January 22, 2021, to pay any outstanding amounts owing in relation to those levies. Should a licensee still owe amounts on either of these two levies after January 22, 2021, their ASCP allocation will be suspended pending full payment of any amounts owing.

Note that licensee must be current and in good standing in relation to amounts owing for Crown oil and gas royalties, Crown mineral disposition rentals and Crown surface lease rentals as of December 1, 2020.

Eligible Licensees: Nomination of Wells, Facilities and Flowlines

Once the eligible licensee has its funding allocation, they will be required to nominate wells, facilities, and flowlines through the Integrated Resource Information System (IRIS). Licensees are encouraged to take advantage of existing abandonment plans by nominating groups of wells, facilities, and flowlines that facilitates area-based closure.

A bulletin was issued on June 26, 2020, notifying of the launch of the Phase 1 nomination process.

If applicable, eligible licensees are asked to submit abandonment projects that cover up to 125% of their funding allocation. This will facilitate the formation of area based closure packages and will give the eligible licensee flexibility in the event that they are unable to abandon or reclaim a selected well, facility or flowlines for any reason. Note that an eligible licensee cannot receive work that exceeds their funding allocation under Phase 1.

Upon nomination of wells, facilities, and flowlines, eligible licensees will identify preferred service companies. The program will make every effort to facilitate the licensee's use of preferred service companies, though this may not be possible in all circumstances.

The template for the nomination of wells, facilities and flowline projects can be downloaded here: ASCP Data template.

The current list of BA codes to be used for the nomination process for the identification of preferred service companies will be posted in November 2020.

Pre-Qualifying Eligible Service Companies

To become an eligible service company under the ASCP, service companies will be required to apply through SaskTenders. The application will be evaluated using the eligibility criteria set out above and, if successful, the service company will be added to the list of eligible ASCP service companies. Eligible service companies will be able to participate in work packages issued by the SRC. The application process has been opened on SaskTenders and can be found at SaskTenders (Competition #7710A).

Note: All licensees should review the supplemental document ASCP Nomination Process Supplemental Information Guide in conjunction with the online training module prior to engaging in the nomination process.

Licensees

Licensees will nominate their wells, facilities and flowlines for abandonment and reclamation through the IRIS system.

The current list of infrastructure nominated for work under the Accelerated Site Closure Program can be found at ASCP Nominated Infrastructure List. Note: this file will be updated frequently.

To assist with the nomination process an online training module was prepared and can be found at User Learning Centre-Liability Management.

In addition to the online training module an ASCP Nomination Process Supplemental Information Guide has been prepared to address nomination questions.

To begin the nomination process, log in to IRIS.

Log in to IRIS

Service Companies

Service companies looking to participate in the program will apply through SaskTenders. Interested service companies should review the information found at:

SaskTenders (Competition #7710A)

Landowners may nominate specific oil and gas sites (Nominated Sites) on their land for consideration for work under the ASCP.

Nomination of a site does not guarantee that it will be abandoned and/or reclaimed under the program. Ultimately, it is the licensee – the owner of the asset – who will determine whether or not the work will be completed under the ASCP.

Guidance

• You must be a legal landowner on title to nominate a site for consideration under the ASCP program;
• You must declare that you have consent from any other legal landowners on title to nominate the site into the ASCP;
• A landowner cannot nominate the same site twice;
• All information must be accurate and complete for sites to be considered nominated into the program;
• There is no deadline for submitting nominations into the program;
• The Landowner Site Nomination process is open to all Saskatchewan landowners. However, only sites with ASCP eligible licensees will currently be considered for work under the program.
• Landowners may also nominate orphaned sites. Again, these sites are not currently eligible under the ASCP. A landowner nominated orphan site may be used to inform the planning process for work completed under the Saskatchewan Oil and Gas Orphan Fund.

Note: The Government of Saskatchewan will not intervene to resolve disputes between the licensee and the landowner responsible for the nominated site. All program work completed under the landowner nomination process will be subject to agreement by both the licensee and the landowner.

How to Nominate a Site

Please follow these steps to nominate a site:

• Step 1 – Complete the Landowner Site Nomination Form electronically.
• Step 2 – Create an email with the subject line Landowner ASCP Site Nomination.
• Step 3 – Attach the completed Landowner Site Nomination Form.
• Step 4 – Send the email with the form attached to ER.servicedesk@gov.sk.ca.
• Step 5 – The list of landowner nominated sites will be posted on the ASCP webpage and will be sent to all eligible licensees for consideration. If an eligible licensee decides to complete work at a landowner nominated site, they will be instructed to contact the landowner.

* For more information on the landowner site nomination process, refer to the ASCP question and answer document that can be found at the bottom of this page.

List of Nominated Sites

[Available soon]

The Government of Saskatchewan is committed to ensuring that Indigenous communities and businesses are provided meaningful opportunities to participate in the ASCP. To deliver on its commitment, the Government of Saskatchewan is introducing the First Nations Stewardship Fund and the Indigenous Business Credit Pool. These two initiatives will direct up to $50M of ASCP funding to support Indigenous participation in the program.

The First Nations Stewardship Fund will allocate up to $20M in program funding to conduct abandonment and reclamation activities in First Nations communities across Saskatchewan. Eligible licensees with oil and gas sites on-Reserve will be able to access the First Nations Stewardship Fund. Eligible licensees are asked to nominate sites for consideration under the Stewardship Fund. Licensees will engage with First Nations communities in the development of work packages under the Stewardship Fund.

The Indigenous Business Credit Pool will create an incentive for eligible licensees to work with qualifying Indigenous major contractors and minor contractors to complete program work. Eligible licensees that utilize qualifying Indigenous major and minor contractors will earn access to additional ASCP funding for future use. The Indigenous Business Credit Pool will make an additional $15M in ASCP funding available to participating licensees. If fully utilized, the Indigenous Business Credit Pool will support a $30M spend on qualifying Indigenous businesses.

To support these initiatives, the Saskatchewan Research Council (SRC) has entered into a collaboration agreement with the Saskatchewan First Nations Natural Resource Centre of Excellence (COE). The COE will work with the SRC, licensees, oil and gas service companies, and First Nations communities to administer the First Nations Stewardship Fund and the Indigenous Business Credit Pool.

For more detailed information and how to apply, please review the Questions and Answers document that can be found at the bottom of this page.

• ASCP Status Report

For further information, view the question and answer document. If you have any additional questions or concerns, contact the ER Service Desk at 1-855-219-9373 or ER.servicedesk@gov.sk.ca.