500 Sask. companies work on inactive oil well cleanup in first year of program

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Saskatchewan companies are in the process of cleaning up and remediating 8,000 inactive oil and gas well sites in the province. (Kyle Bakx/CBC - image credit)
Saskatchewan companies are in the process of cleaning up and remediating 8,000 inactive oil and gas well sites in the province. (Kyle Bakx/CBC - image credit)

The Saskatchewan government says the first year of its abandoned oil well clean-up program resulted in $184 million in contracts to 500 companies in the province.

Last May, the federal government provided $400 million over two years to the province for its Accelerated Site Closure Program. It aims to clean up 8,000 inactive wells and create the equivalent of 2,100 full-time jobs over two years.

The provincial and federal governments classify the program as spending to support COVID-19 recovery through the creation of jobs and maintaining work for oil and gas companies.

The first phase of the program ran until December 2020 and used $100 million of the allotted $400 million. The second phase started in January 2021 and runs until March 2022.

"This program has helped to create and maintain oil and gas service sector jobs and sustain the overall health of Saskatchewan's energy sector during a very challenging time," said Minister of Energy and Resources Bronwyn Eyre in a news release.

Eyre called the program a "major economic stimulus program that is also good for the environment."

The federal Minister of Natural Resources Seamus O'Regan said the program "kept workers on the job during the pandemic."

"We're cleaning up our environment, and supporting the hardworking men and women in our oil and gas sector including in First Nations and Métis communities," he said.

Under the program, oil companies nominate wells they want cleaned up. Then the system allocates money based on the company's share of inactive wells across the province.

The Saskatchewan Research Council contacts eligible service companies to carry out the work.

The provincial government said $61 million has been paid for work already completed under the program, including:

  • 1,385 well abandonments and decommissions.

  • 237 flowline abandonments.

  • 13 facilities.

  • 2,545 site remediation and reclamation activities.

Broken down by region, the program includes more than $184 million in work packages to the following oil and gas producing regions:

  • Estevan - $59,513,766.

  • Swift Current - $36,714,611.

  • Kindersley - $27,863,467.

  • Lloydminster - $60,579,289.

The program is part of a $1.7-billion federal initiative to clean up oil sites across the country.