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Saskatchewan provincial government unveils help for oil and gas industry

Click to play video 'Saskatchewan government unveils help for oil industry' Saskatchewan government unveils help for oil industry
WATCH: The measures, designed to help the industry weather the coronavirus pandemic, don't include funding – Apr 14, 2020

The Saskatchewan government announced help for the provincial oil and gas industry, which is struggling with low oil prices brought on by coronavirus pandemic and a resolved price war between Saudi Arabia and Russia.

The measures address administrative issues and did not include any funding.

“This package is something we felt we could bring out now as we continue to look at other things,” energy minister Bronwyn Eyre said on a conference call with reporters.

READ MORE: Coronavirus and the OPEC oil deal: What it means for Saskatchewan

Deadlines for a “series of filings” were extended to help the oil and gas industry stabilize while employees transitioned to working from home, a statement said.

As well, mineral rights which would have expired in 2020 have been extended by one year.

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The only measure for which a dollar figure was given was the 50-per cent reduction of the Oil and Gas Administrative Levy for 2020, with the fee payment delayed until October. The statement said the reduction will save the industry $11.4 million.

Eyre said the industry created 34, 000 jobs in the province and made more than $600 million for the province last year.

When asked why the province didn’t provide financial help, the minister said the provincial government is waiting for action from the federal government.

Prime Minister Justin Trudeau and the federal natural resources minister, Seamus O’Regan, said the government is preparing a bailout for the oil and gas sector but have not specified when it will be announced.

READ MORE: Trudeau says relief for oil sector amid COVID-19 pandemic coming ‘shortly’

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“We’re expecting to see that relief package and will be looking to harmonize, where possible, what we can with federal efforts” Eyre said.

She told reporters she stressed the province’s need for a Saskatchewan-specific approach, especially regarding abandoned oil wells.

“We have to be very aware of the nature of our low-producing wells in Saskatchewan, which, while low-producing, can also [produce] for a very long time.”

A former oil executive said the measures were helpful but any bailout, whether from the provincial or federal government, wouldn’t be enough to return the oil industry to what it once was.

READ MORE: Drop in oil prices of ‘concern’ to Saskatchewan, but provincial budget proceeding as planned

“The oil industry is a global industry premised on supply and demand and… like any other commodity right now, we’re in a global recession,” said C. Brooke Dobni, a professor at the University of Saskatchewan’s Edwards School of Business.

He said it would be several years before oil prices returned to normal after the pandemic and that business and countries will have to adapt.

“No matter what the Saskatchewan government does, or even what the industry does, it’s not going to affect the world demand for oil.”

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