B.C. launches major stimulus program for oil and gas

[Cos]

CALGARY - The British Columbia government this morning announced a major stimulus program to kick-start its oil and gas industry, including a package of royalty incentives and legislative changes.

In a statement, the government said the program is designed to produce "immediate economic benefits" for the province.

“B.C. is one of the most competitive oil and gas jurisdictions in North America, and this stimulus package will further strengthen the sector while increasing provincial revenues,” said provincial energy minister Blair Lekstrom. “In this day and age capital investment is very fluid and we want to encourage the oil and gas sector to invest in British Columbia.”

The package includes four royalty and two regulatory initiatives including:

*A one-year, two per cent royalty rate for all wells drilled in a 10-month window from September 2009 to June 2010.

*An increase of 15 per cent in existing royalty deductions deep gas drilling.

* Qualification of horizontal wells drilled between 1,900 and 2,300 metres into the deep royalty credit program.

* An additional $50 million allocation for the Infrastructure Royalty Credit Program to be offered this fall to stimulate investment in oil and gas roads and pipelines.

Regulatory initiatives amendments to the drilling licence regulation to create flexibility that will allow industry to move wells to production while not losing privileges to convert drilling licences to leases.

Source: http://www.calgaryherald.com/launche...254/story.html



All I can say is.... shit. And thanks a lot ED!

[atgilchrist]

Crap, now we'll all have to move to Ft. St. John.

[Xtrema]

Alberta got pwned

[kenny]

Something seems wrong here.

Lots of Stelmach haters that claim that he is driving all the O&G investment out of the province but if that were the case, why would the BC Govt need to launch a major program like this to encourage investment?

[Tik-Tok]

Originally posted by kenny
why would the BC Govt need to launch a major program like this to encourage investment?

Pipeline bomber.

[Shogged]

Originally posted by kenny
Something seems wrong here.

Lots of Stelmach haters that claim that he is driving all the O&G investment out of the province but if that were the case, why would the BC Govt need to launch a major program like this to encourage investment?

because he is competing with more than just alberta. its the perfect time to steal investment from alberta because we aren't doing enough to keep it here. Saskatchewan is doing well so they're competition for BC too.

[Xtrema]

Originally posted by kenny
Something seems wrong here.

Lots of Stelmach haters that claim that he is driving all the O&G investment out of the province but if that were the case, why would the BC Govt need to launch a major program like this to encourage investment?

Kick a man while he's down?

[atgilchrist]

Originally posted by kenny
Something seems wrong here.

Lots of Stelmach haters that claim that he is driving all the O&G investment out of the province but if that were the case, why would the BC Govt need to launch a major program like this to encourage investment?

In BC, there is little to no infrastructure that is required to make the potential development feasible. By making royalty rates effectively nil, the gov't is hoping to encourage companies to sink the considerable amounts of cash necessary to build this infrastructure. Once companies decided to spend this cash, they are effectively committing themselves to years of development in BC in order to "pay off" the initial infrastructure costs.

The BC government is basically sacrificing a year's worth of royalties in exchange for billions in long-term development in the province.

[badatusrnames]

Originally posted by atgilchrist


In BC, there is little to no infrastructure that is required to make the potential development feasible. By making royalty rates effectively nil, the gov't is hoping to encourage companies to sink the considerable amounts of cash necessary to build this infrastructure. Once companies decided to spend this cash, they are effectively committing themselves to years of development in BC in order to "pay off" the initial infrastructure costs.

The BC government is basically sacrificing a year's worth of royalties in exchange for billions in long-term development in the province.

Look at Horn River. Huge resource, but needs tons of infrastructure at the moment.

[kenny]

Originally posted by atgilchrist


In BC, there is little to no infrastructure that is required to make the potential development feasible. By making royalty rates effectively nil, the gov't is hoping to encourage companies to sink the considerable amounts of cash necessary to build this infrastructure. Once companies decided to spend this cash, they are effectively committing themselves to years of development in BC in order to "pay off" the initial infrastructure costs.

The BC government is basically sacrificing a year's worth of royalties in exchange for billions in long-term development in the province.

Ahh makes sense. Now I wonder if any big players will bite.

[Seanith]

Originally posted by kenny


Ahh makes sense. Now I wonder if any big players will bite.

We'll see I suppose. Maybe i'll have to move to B.C if that happens.

[phaneufed]

Originally posted by Seanith


We'll see I suppose. Maybe i'll have to move to B.C if that happens.

Just moved to Van, wonder if there's any good juniors to get on with

[Seanith]

I could live in Vancouver. My understanding is there aren't a lot of engineering jobs out there... I haven't really looked into it either

[in*10*se]

personally, i think BC isn't wanting oil and gas companies to move there, they want their capital spending to be spent in their province.

Only shitty thing right now is that gas prices are so low... if gas prices were really high, this would be a great time to drill for gas in BC as everyone is planning for spring break up (ie. winter) to move all the rigs in. but since gas is low, there is no reason to spend capital to drill for gas even if royalties are low.

and BC isn't really sacrificing a year of royalties, they're sacrificing alot of money actually. When you drill gas wells, the largest portion of the gas comes out within the first year, so this is actually a really good incentive... now if nat gas prices were to go up... BC would light up with activity...

[ZenOps]

I have my doubts that there is any significant oil to be found in B.C.

Right in first year geology you get to learn about tectonic plate movement and subduction zones.

East of the Rocky mountains actually created a favorable plateau upon which oil/gas gets caught in "strateographic" traps. West of the Rocky mountains, the tectonic plate heave makes it much more likely to have deep earth precious metals pushed to the surface.

So In otherwords, left side of rockies = good for metals, bad for oil, right side of rockies = good for oil, bad for metals.

Its true of nearly all mountainous regions relative to plate movement.

[Sugarphreak]

....

[atgilchrist]

Not much oil, tons and tons of gas.

[Seanith]

Originally posted by in*10*se
personally, i think BC isn't wanting oil and gas companies to move there, they want their capital spending to be spent in their province.

Only shitty thing right now is that gas prices are so low... if gas prices were really high, this would be a great time to drill for gas in BC as everyone is planning for spring break up (ie. winter) to move all the rigs in. but since gas is low, there is no reason to spend capital to drill for gas even if royalties are low.

and BC isn't really sacrificing a year of royalties, they're sacrificing alot of money actually. When you drill gas wells, the largest portion of the gas comes out within the first year, so this is actually a really good incentive... now if nat gas prices were to go up... BC would light up with activity...

Having gas prices low is good for getting oil out of the ground though. Especially with SAGD. They use gas to heat water into steam.

[johnboy27]

Originally posted by atgilchrist
Not much oil, tons and tons of gas.

Yeah what he said. I have worked on some huge shale gas projects in Northern B.C.

[ExtraSlow]

Originally posted by ZenOps
I have my doubts that there is any significant oil to be found in B.C.

Right in first year geology you get to learn about tectonic plate movement and subduction zones.

East of the Rocky mountains actually created a favorable plateau upon which oil/gas gets caught in "strateographic" traps. West of the Rocky mountains, the tectonic plate heave makes it much more likely to have deep earth precious metals pushed to the surface.

So In otherwords, left side of rockies = good for metals, bad for oil, right side of rockies = good for oil, bad for metals.

There is a huge part of BC that is "left" of the mountains.