Saskatchewan-based companies receive first chunk of federal funding for inactive well cleanup

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. Jeff McIntosh / The Canadian Press

More workers in Saskatchewan’s oil and gas industry will head back to work after the province approved $12 million in federal funding to clean up inactive wells.

“This first parcel of work projects incorporates every oil region in the province. Most importantly, it gets the Saskatchewan service sector back to work,” said Energy and Resources Minister Bronwyn Eyre in a press release.

The work will be spread out across the Lloydminster, Kindersley, Swift Current and Estevan areas and includes 300 well abandonments, 300 flowline abandonments, 75 facility decommissions and 700 other activities related to site reclamation.

Read more: Trudeau announces $1.7B to clean up orphan wells in B.C., Alberta, Saskatchewan

Up to 50 Saskatchewan-based service companies will obtain the work through the Accelerated Site Closure Program (ASCP), which was awarded $400 million from the federal government.

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The program — which aims to keep people in the oil and gas industry employed during the COVID-19 pandemic — will run until 2022.

“This activity could not come at a better time, and will provide much needed relief for struggling oilfield businesses and families,” said Canadian Association of Oilwell Drilling Contractors President and CEO Mark Scholz in a statement.

The oil and gas sector has been one of the hardest-hit sectors in the province, says MLA for Lloydminster Colleen Young.

“Over the past few months, I have spoken directly with many Lloydminster contacts, and I will be glad to see them, and other Saskatchewan-based service companies, back in the field,” Young said in a statement.

The program remains in its initial phase, but Phase 1 will allocate up to $100 million in federal funding to Saskatchewan service companies.

Read more: Aid for Canada’s energy sector heavily weighted towards fossil fuels in COVID-19 response

Moving forward, the government of Saskatchewan says they will be involving Indigenous partners in the program. Some Indigenous-owned service companies have already been pre-qualified to obtain work with the program including the Onion Lake region, says the government.

ASCP was launched in May and prioritizes Saskachewan-based companies. It will be rolled out in several phases, which remains under development.

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The province estimates that up to 8,000 inactive wells and facilities will be abandoned and reclaimed over the life of this program. The federal funding — which is being overseen by the province — is expected to support approximately 2,100 full-time equivalent jobs in the service industry.

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