#Alberta; #OilfieldServies; #DelayedDispersalOfFund; #SlowRecoveryOfOilIndustry
Alberta, Jul 8 (Canadian-Media): The cleanup activity in the oilfield service companies in Alberta had been halted due to Alberta's late dispersal of funds to oil and gas workers to keep oilfield service companies afloat, media reports said.
Oil & Gas Industry. Image credit: Twitter handle
The federal government had handed over responsibility of dispersing the funds of $1.7 billion program announced in April to the British Columbia, Alberta and Saskatchewan governments to help keep tens of thousands of inactive oil and gas wells across western Canada afloat and reduce the environmental risk associated with having so many wells sitting idle.
The Alberta government received up to $30,000 and has initially offered to fund the full amount to clean up a well.
With industry players competing for the government funding, oil and gas producers had stopped spending any of their own money to clean up wells resulting in the wells being dried up completely, and reversed what the stimulus program was meant to achieve.
During the first phase of Alberta's program launched on May 1, Scott Darling, president of Calgary-based Performance Energy Services and Production said he had seven people working on submitting applications, including himself.
But with the rise of applications to about 2,800 over the a few weeks, Darling received four approvals and 126 rejections resulting in the freezing of the industry.
So far, the Alberta government said it has approved about $64 million in applications for its $1 billion well clean up program.
Alberta's program may not provide an immediate boost in activity for the oilfield service sector because when an application is approved, the company has until the end of 2022 to complete the work.
In addition, those in the industry say there are delays when different applications for the same well are processed at different times.