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    Akselos and Shell sign framework agreement on digital twin technology

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    Asia Pacific upstream transactions plunge to lowest this century

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    Italy’s largest pipeline firm continues push into hydrogen tech

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    Korean bunkers tighten with cargo, barge constraints

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    Russia, Turkmenistan Join Forces to Improve Maritime Transport in the Caspian Sea

    Venezuela resumes direct oil shipments to China despite U.S. sanctions

    Venezuela resumes direct oil shipments to China despite U.S. sanctions

    Repsol to invest $90 million in two low-emissions projects in Spain

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    Downstream oil regulator PNGRB simplifies gas pipeline tariff

    Downstream oil regulator PNGRB simplifies gas pipeline tariff

    Arabian Pipes Co wins $42.6m supply contract from Saudi Aramco

    APA Group to invest $337m in gas pipeline construction in Australia

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    Global oil and gas projects pipeline at US$4 trn

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    BP begins gas production at West Nile Delta project

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    Bechtel and Cheniere Deliver LNG Ahead of Schedule on US Gulf Coast

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    US Polyethylene Export Market Report 2017-2020

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    Fugro to offer positioning services for Petronas Suriname drilling campaign

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    Siemens Energy partners with ProFlex Technologies to provide IoT-based pipeline leak detection

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    Digital technologies boosts earnings at Johan Sverdrup

    Angola Oil & Gas Conference & Exhibition to return on 15-16 June 2021

    Angola Oil & Gas Conference & Exhibition to return on 15-16 June 2021

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    CNOOC Limited Announces Key Operational Statistics for Q1 2020

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    bp agrees to sell its petrochemicals business to INEOS

    bp agrees to sell its petrochemicals business to INEOS

    Empire Pipeline Acquires Gibson Terminal In Terrebonne Parish, Louisiana

    CNOOC Limited Announces Key Operational Statistics for Q1 2020

    CNOOC Limited Announces Key Operational Statistics for Q1 2020

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    Renewables: Total Continues to Expand its Footprint in Southeast Asia in Distributed Solar

    ExxonMobil earns $3.2 billion in third quarter 2019

    ExxonMobil earns $3.2 billion in third quarter 2019

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    BP to sell Alaska business to Hilcorp

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    ExxonMobil Earns $3.1 Billion in Second Quarter 2019

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    Akselos and Shell sign framework agreement on digital twin technology

    Akselos and Shell sign framework agreement on digital twin technology

    Asia Pacific upstream transactions plunge to lowest this century

    Asia Pacific upstream transactions plunge to lowest this century

    Italy's largest pipeline firm continues push into hydrogen tech

    Italy’s largest pipeline firm continues push into hydrogen tech

    Korean bunkers tighten with cargo, barge constraints

    Korean bunkers tighten with cargo, barge constraints

    Russia, Turkmenistan Join Forces to Improve Maritime Transport in the Caspian Sea

    Russia, Turkmenistan Join Forces to Improve Maritime Transport in the Caspian Sea

    Venezuela resumes direct oil shipments to China despite U.S. sanctions

    Venezuela resumes direct oil shipments to China despite U.S. sanctions

    Repsol to invest $90 million in two low-emissions projects in Spain

    Mammoet launches SK6,000 crane to enhance FPSO modularization strategies

    Downstream oil regulator PNGRB simplifies gas pipeline tariff

    Downstream oil regulator PNGRB simplifies gas pipeline tariff

    Arabian Pipes Co wins $42.6m supply contract from Saudi Aramco

    APA Group to invest $337m in gas pipeline construction in Australia

  • Projects
    Global oil and gas projects pipeline at US$4 trn

    Global oil and gas projects pipeline at US$4 trn

    BP begins gas production at West Nile Delta project

    BP begins gas production at West Nile Delta project

    Bechtel and Cheniere Deliver LNG Ahead of Schedule on US Gulf Coast

    Bechtel and Cheniere Deliver LNG Ahead of Schedule on US Gulf Coast

    ABB wins $79m order for Bab onshore project in Abu Dhabi

    Phillips 66 and Bridger Pipeline LLC Announce Open Season for Rockies and Bakken Crude Oil Pipeline System

    Phillips 66 and Bridger Pipeline LLC Announce Open Season for Rockies and Bakken Crude Oil Pipeline System

    BHP successful in bids for blocks in the offshore Orphan Basin in Eastern Canada

    Operational excellence and safety continue to be a key driver in oil and gas sector

    Gazprom plans to carry forward cost efficient in 2018

    TGS announces new seismic project in the Anadarko basin

  • Whitepapers

    OGA 2017 Post Show Report

    US Polyethylene Export Market Report 2017-2020

    US Polyethylene Export Market Report 2017-2020

    Embedded SSD Flash Management

    Enterprise SSD: More Than Just a New Kind of Hard Drive

    Efficiency, Visibility and Reliability Keys to lower costs and greater profitability in oil and gas operations

    Don’t Miss the Unconventional Resource Revolution’s Next Wave

    Better Safety, Better Business: Maintain Compliance and Drive Revenue: Put All of Your Data to Work

    Breaking the Application Barrier: Why Data is the Most Valuable Asset in the Oil and Gas Industry

    Drilling Optimization Through Advanced Analytics Using Historical and Real-Time Data

  • Press Releases
    Fugro to offer positioning services for Petronas Suriname drilling campaign

    Fugro to offer positioning services for Petronas Suriname drilling campaign

    Siemens Energy partners with ProFlex Technologies to provide IoT-based pipeline leak detection

    Siemens Energy partners with ProFlex Technologies to provide IoT-based pipeline leak detection

    Digital technologies boosts earnings at Johan Sverdrup

    Digital technologies boosts earnings at Johan Sverdrup

    Angola Oil & Gas Conference & Exhibition to return on 15-16 June 2021

    Angola Oil & Gas Conference & Exhibition to return on 15-16 June 2021

    ADNOC announces major rig fleet expansion program

    ADNOC invests $245 million to upgrade main oil lines and Jebel Dhanna Terminal

    ExxonMobil to sell Norway upstream operations for $4.5 billion

    ExxonMobil announces Redtail discovery offshore

    Saudi Aramco to acquire Shell’s share of the SASREF refining joint venture

    Aramco discovers two new oil and gas fields in northern Saudi Arabia

    Ampelmann and Olympic Shipping join forces in project for Ithaca Energy in the North Sea

    Faltering oil demand puts new pressure on OPEC+ production agreements

    Siemens to explore leveraging wind power for hydrogen production

  • Market Reports
    CNOOC Limited Announces Key Operational Statistics for Q1 2020

    Aramco announces second quarter and half-year 2020 results

    bp agrees to sell its petrochemicals business to INEOS

    bp agrees to sell its petrochemicals business to INEOS

    Empire Pipeline Acquires Gibson Terminal In Terrebonne Parish, Louisiana

    CNOOC Limited Announces Key Operational Statistics for Q1 2020

    CNOOC Limited Announces Key Operational Statistics for Q1 2020

    Renewables: Total Continues to Expand its Footprint in Southeast Asia in Distributed Solar

    Renewables: Total Continues to Expand its Footprint in Southeast Asia in Distributed Solar

    ExxonMobil earns $3.2 billion in third quarter 2019

    ExxonMobil earns $3.2 billion in third quarter 2019

    BP to sell Alaska business to Hilcorp

    BP to sell Alaska business to Hilcorp

    Exxon Mobil Second Quarter 2019

    ExxonMobil Earns $3.1 Billion in Second Quarter 2019

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Alberta overhauls system to clean up old oil and gas wells, with 90,000 sitting idle

venkat by venkat
July 30, 2020
in News
0
Sweden's Tethys Oil signs exploration and production agreement for Omani block

The Alberta government is revamping how it regulates oil and gas producers in an attempt to start addressing the province’s swelling inventory of inactive oil and gas wells.

The biggest change will be introducing a requirement for companies to spend a minimum amount of money every year toward cleanup of oil wells, pipelines and facilities.

Alberta has more than 90,000 inactive wells, in addition to 73,000 abandoned wells that have been dismantled but not fully reclaimed. The estimated cost of cleanup varies greatly but is considered to be in the tens of billions of dollars.

The government will formally announce the new program on Thursday. Many experts are welcoming the changes, even though it may not result in companies having to spend more money on reclamation work.

Energy Minister Sonya Savage is hopeful the new annual targets will help to address the problem.

“It’s like paying down a mortgage. You’ve got a target and every year you’re chipping away at it, paying it down and eventually you’ll have that mortgage paid off. That’s what the inventory reduction and the requirement for annual spending targets will do,” she said in an interview.

Savage said companies may be required to spend at least four per cent of the estimated cost of their inactive wells, which would increase over time.

Still, the exact percentage is still to be determined and it’s not clear whether there will be any enforcement, which will be the responsibility of the Alberta Energy Regulator (AER).

“We’ll work with industry to make sure they can reach those targets. You can’t be setting targets too high that they can’t meet. That’s not helpful for anyone,” she said.

“The AER will work on what kind of feasible penalties, if any, there would be. But we’re telling them these [spending targets] need to be mandatory.”

The provincial government will give the regulator extra powers to gauge the financial health of companies, with the goal of intervening earlier when producers begin to struggle, which raises the risk that their cleanup liabilities may not be addressed.
Alberta has about 160,000 abandoned and inactive wells throughout the province. (CBC)

That’s a good approach, according to Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents small- and medium-sized oil and gas producers. He worked at the AER several years ago.

“As a former regulator, what you’re looking for there is to understand the financial position of those companies and how to make sure that the companies know the regulator is paying greater attention to them.”

Goodman said the finer details of the changes will be important, but in general, he supports the overhaul of the program.

At this point, he said, it is not clear whether there will be an added financial burden on industry, depending on how much individual companies are already spending on cleanup.

“I think in some cases there could be. I think that is acceptable,” he said.

“The best outcome … is to make sure companies are consistently spending and consistently reclaiming as they go, and when that doesn’t happen, that’s when you get into a situation where you do have a potential broader problem.”

Suncor CEO encouraged by Trans Mountain pipeline, less sure of Keystone XL’s completion

Regardless of COVID, the outlook for the oilsands gets dimmer year after year

To this point, Alberta has relied on a liability management system that is supposed to make sure companies are financially healthy enough to pay for cleanup later on.

If a company’s estimated assets fall below the cost of its environmental liabilities, the AER can collect a security deposit.

But the regulator has been using a formula based on out-of-date commodity prices that inflated the assets of companies. As a result, companies were not asked to put down large enough security deposits for future cleanup.

The energy minister is describing the changes as a bold step after decades of inaction by former governments, even as the problem grew larger year after year.

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