A new program has been announced to support Saskatchewan’s petroleum industry.
Energy and Resources Minister Bronwyn Eyre announced the Waterflood Development Program, which aims to enhance production capacity by about 72 million barrels over the next 35 years.
She says waterflooding is an established technique for recovering oil.
“(It) basically takes water that’s been used in the primary process and reinjects it into the well to create or maintain the pressure that’s necessary to extract.” Eyre explained.
The program, at maximum uptake, will support 375 million in new investment over the next five years.
Eyre says the incentive acts as a royalty deferral, helping companies make capital investments in good time, “so that they can make these conversions quickly, put forward the capital necessary to do that. The average conversion cost – usually for these wells – is about 5-hundred thousand dollars, and then defer royalties on those for 3 years.”
Eyre says this has a clear connection to sustaining and extending the lifespan of the wells.
This program is the alternative to Alberta’s eight-point-seven percent cut in oil production, something Premier Scott Moe said on Monday Saskatchewan won’t do.