The Saskatchewan government has extended two programs aimed at encouraging investments in the province’s oil and gas sector.
The provincial government has extended the existing Oil and Gas Processing Investment Incentive to 2029, with an additional $95.81 million (CAD 130.0 million) allotted to support the program as well as the newly created Critical Mineral Processing Investment Incentive.
The existing Saskatchewan Petroleum Innovation Incentive has also been extended to 2029, with an additional $51.59 million (CAD 70.0 million) earmarked to support the program, along with a newly created program called the Saskatchewan Critical Minerals Innovation Incentive.
Saskatchewan is also introducing a new multilateral well drilling program to grow incremental oil production in the province, according to a news release Wednesday.
The programs support the government’s growth plan goal of increasing oil production by 25 percent to 600,000 barrels per day, it said, adding that its 2024-25 budget supports its “world-class natural resource industries through strategic investments in geoscience, oil and gas, and critical minerals”.
The Oil and Gas Processing Investment Incentive (OGPII) offers transferable Crown royalty and freehold production tax credits for qualified greenfield or brownfield value-added projects at a rate of 15 percent of eligible program costs, according to the government’s website. OGPII is open to value-added projects across all segments of Saskatchewan's oil, gas, helium, and lithium sectors as well as chemical fertilizer facilities.
The Saskatchewan Petroleum Innovation Incentive (SPII) offers transferable Crown royalty and freehold production tax credits for qualified innovation commercialization projects at a rate of 25 percent of eligible project costs. The program targets a broad range of innovations deployed across all segments of Saskatchewan's oil, gas, helium or lithium industry. The SPII program is open to both pilot projects and commercial scaling projects.
This year's budget includes $10.0 million in funding over 10 years for the Public Geoscience Initiative. The investment will increase exploration to support the province's Critical Minerals Strategy, according to the release.
"Saskatchewan's energy and mining sectors continue to drive our strong and growing economy", Energy and Resources Minister Jim Reiter said. "We will ensure that Saskatchewan remains one of the best places in the world to invest in exploration and resource development”.
Saskatchewan continues to focus on regulatory excellence to maintain a reliable and competitive business environment, it said. In 2024, the government will “continue to ensure a compliance management framework that is clear and consistent, and will modernize field inspections and incident reporting”, it said.
The Saskatchewan government in February joined the chorus of voices opposing Canada's fossil fuel emissions cap and draft methane regulations, saying they would cost the province’s oil and gas sector between $5.18 billion and $6.66 billion (CAD seven billion and nine billion) by 2030.
The federal government's submissions to Environment and Climate Change Canada on the Oil and Gas Emissions Cap and Methane 75 regulations highlight the negative impacts both policies will have on the province and the energy sector, Saskatchewan said in an earlier statement.
According to Saskatchewan's own preliminary economic analysis, the impact of the emissions cap, alongside Methane 75, suggests that 20 to 30 percent of Saskatchewan's total production is at risk by 2030. The province said this would “negatively impact communities across the province and significantly reduce employment, gross domestic product, and royalties and other tax revenues that fund critical public services”.
Saskatchewan's upstream oil and gas industry has made significant progress in reducing emissions and “will continue to achieve results” guided by policies and programs already in place. From 2015 to 2022, greenhouse gas emissions in Saskatchewan from venting and flaring at upstream oil facilities were measured as being down 64 percent and methane emissions at a decrease of 70 percent, the statement noted.
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