Released on March 19, 1998
Energy and Mines Minister Eldon Lautermilch provided details today onthe Saskatchewan Petroleum Research Incentive announced in the
provincial budget. The research incentive is targeted at
Saskatchewan-based technology development in Saskatchewan's oil and
gas sector and will have significant economic development and job
creation effects. The initiative is expected to stimulate up to
$120 million in private sector investment and create 1,300 high-paying
jobs.
"This five-year package will help develop new oil and natural gas
technologies," Lautermilch said. "The application of the new
technologies will generate jobs and supplemental resource revenue for
the people of Saskatchewan through enhanced production, increased
recovery rates and extension of the life of oil and gas fields. It
will provide a very attractive pay-back to the people of this
province."
The Petroleum Research Incentive, for approved expenses after
March 19, 1998, will provide oil and natural gas royalty tax credits
to offset up to 30 per cent of approved industry costs for field pilot
projects in rural Saskatchewan. The incentive will also cover
15 per cent of industry's costs to support research at Saskatchewan
research institutions.
Over the next five years, this initiative is expected to provide
$17.5 million in incentives for oil and gas research. The oil
and gas industry will also be eligible for the newly created
Saskatchewan Research and Development Tax Credit, equal to
15 per cent of qualified R&D expenditures made after March 19,
1998. This is an R&D tax credit of more general application and
will follow the R&D eligibility rules in the federal Income Tax
Act.
"The research incentive combined with the more general R&D tax
credit will encourage significant new spending by industry to
develop new technologies to sustain and grow Saskatchewan's oil
and natural gas sector," Lautermilch said.
The oil and gas industry has a track record for investing in new
technologies if they can be proven to work in the field.
Experience with an earlier and now expired initiative (the
Canada-Saskatchewan Heavy Oil Research Program) revealed that
industry invested up to $6 for every $1 in financial support for
field projects. That program supported the field research that
proved the effectiveness of horizontal drilling in Saskatchewan,
now widely in use and credited as largely responsible for the
past four consecutive record years of oil production and job
growth.
"With the current research capabilities of the Saskatchewan
Research Council and the University of Regina's decision to
develop a petroleum engineering specialty, we feel the conditions
are particularly ideal to work with industry to develop
Saskatchewan research capacity," Lautermilch said. "Developing
this research capability will provide opportunities for creating
high technology jobs in Saskatchewan."
"We need to focus on developing the next generation of technology
that will enable greater recovery, improved environmental
protection and energy efficiency by making an investment in one
of our province's major industries and in the people whose jobs
depend upon it," Lautermilch said.
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For more information, contact:
Marg Moran McQuinn
Energy and Mines
Regina
Phone: (306) 787-2567
To apply for the program:
Malcolm Wilson
Energy and Mines
Regina
Phone: (306) 787-2618